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The Markets October 15, 2010
Media Firm Makes DB to DC Switch
Journal Communications, a Milwaukee-based media company, is freezing
its defined benefit plan and boosting its 401(k) match, effective
January 1, 2011.
Reported by PLANADVISER staff
A news release said the Annual Employer Contribution (AEC) also will no longer be a component of the 401(k) plan.
Starting in 2011, Journal Communications will match $0.50 on every dollar up to 7% of eligible pay for a maximum match of 3.5%, the company said. The prior match was $0.50 on every dollar up to 5% of eligible wages for a maximum match of 2.5%. All employer contributions will vest 100% as soon as they are made. In addition, Journal will begin offering a Roth 401(k) option for after-tax contributions.
In February 2009, Journal Communications temporarily suspended 401(k) matching contributions. Additionally, the company suspended benefit accruals to the pension plan, SERP, and the AEC for an 18-month period beginning July 1, 2009.
The changes do not affect the benefits of retirees, beneficiaries, or terminated vested participants of the pension plan, the company said.
“We believe this decision allows us to maintain our financial flexibility while still offering a solid retirement benefit,” said Steven J. Smith, Chairman, President and CEO, in the news release. “Enhancing our 401(k) matching contributions will help us recruit and retain talented people as competitive 401(k) plans are a valued benefit in today’s workplace.”