Spartanburg, SC, January 11, 2006--Faced with global competition and rising costs, Milliken & Co., has frozen its employee pension plan, according to the Spartanburg, Herald-Journal.
The newspaper reported that the freeze, which took effect Dec. 31, means that the company is no longer contributing to employees' pension accounts. The company has 9,300 U.S. employees.
When a company freezes its pension plan, employees' retirement benefits no longer grow, but upon retirement workers receive the benefits they built up until the time of the freeze.
Company spokesman Richard Dillard said in a written statement that the changes were necessitated by, "the very competitive global cost competitiveness, and pension cost volatility, which all companies are facing."
The company enhanced its 401K plan to compensate for the pension freeze, Dillard said.
Since the company is privately held, Milliken is not required to divulge its financial status, and Dillard declined to provide further details about the changes.
"We believe our retirement plan remains very competitive in our industry and is consistent with the evolution of company retirements plans throughout the U.S.," Dillard said.
Indeed, some other U.S. employers are also freezing their pension plans.
IBM announced this month it would freeze its pension plans, and Verizon, Lockheed Martin and Motorola have done so as well.
When Spartanburg-based Lockwood Greene was purchased by CH2M HILL in 2003, pensions were not among the benefits the new company offered, said spokesman Brian Mershon.
Everyone who was vested in the company at the time of the purchase will receive pension payouts upon retirement, Mershon said, but a third party administers the program and CH2M HILL Lockwood Greene is no longer involved.
BMW offers a pension plan to all of its employees, including the ones at BMW Manufacturing's Spartanburg County plant. Company spokeswoman Bunny Richardson said the company has no plans to alter its pension program.
QS/1 offers something altogether different.
For the past 40 or more years, the Spartanburg-based pharmaceutical software company has offered what it calls profit sharing. If the company performs well, each employee receives a payment equal to 15 percent of his or her salary. Payments are deposited into an individual account, employees choose how to invest the money and the company cannot touch it.
The company also offers a 401K but not many employees take advantage of it, said QS/1 President Bill Cobb.
Although the annual payment is not guaranteed, the company has never missed a payment, Cobb said.
"It is generous. I've always thought so," Cobb said.
"If you stay here 30 years, you leave here with a pretty good nest egg."
