Starting January 2008, Ryder System Inc. plans to freeze its pension plan for 9,400 of its 27,000 employees, providing them instead with an enhanced 401(k) savings plan.
Ryder stated no one would lose previously earned pension benefits and that the 17,600 employees not covered under the mandatory switch would also be given the option to remain in the current pension plan or participate in the enhanced 401(k) savings plan.
“We have taken great care to develop a program that we believe is in the best combined long-term interests of our employees and our company,” said Ryder chairman & CEO Greg Swienton. “These changes are in line with established marketplace trends, in which retirement savings through a 401(k) plan is increasingly becoming the standard retirement offering by employers, including our competitors and customers.”
He added that Ryder would make automatic contributions of 3% of pay, even if employees do not choose to make a contribution. The company would also provide a 50% match on employees’ contributions up to 5% of pay. Employees also have the opportunity to earn an additional Ryder contribution of up to 3% of pay, based on the company performance.