NEW YORK — Alcoa announced this week it will eliminate its defined benefit pension plan for most new U.S. salaried employees effective March 1. In its place, the company said it will offer a “competitive, more-flexible and portable” 401(k) defined contribution plan for new hires.
“We have very competitive benefit plans at Alcoa, and we periodically evaluate the level of competitiveness to ensure our plans are in line with the marketplace,” said Paul Thomas, executive vice president, people, ABS and culture. According to Alcoa, a review of the benefits marketplace indicates nearly 65 percent of employers now have a 401(k) plan as their primary retirement vehicle.
Under the new plan, the company will make a contribution of three percent of an employee’s annual salary and bonus to the retirement plan, whether or not the employee contributes to the 401(k) plan. In addition, the company will match the first six percent of salary that an employee contributes to the savings plan.
The changes will not impact current Alcoa employees or retirees. Workers covered by collective bargaining units and certain non-bargained hourly workers are also not impacted by the change.
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