3M Closes Pension Plans to New Hires

Pension plans for current retirees and employees will not change, but 3M introduced new plans for 401(k) savings and retiree medical coverage, according to a news release. The company said the new plans account for 3M’s aging workforce and the increasing ratio of retirees to active employees.

A new 401(k) savings plan, in which 3M will contribute 3% of pay to a retirement account and provide a dollar-for-dollar match on employee contributions of up to 6% of pay, will replace the pension plan for new hires, the announcement said. Employees in the company’s current 401(k) plans will receive a 25 cent increase in the matching contribution rate, which replaces variable quarterly and annual company contributions.

In addition, 3M announced a revised retiree medical plan. The plan provides flexibility to choose coverage best suited to retirees’ needs, the company said. For retirees not yet eligible for Medicare the plan offers a new cost-sharing approach to help pay medical premiums, as well as the choice to participate in a consumer-directed plan with a tax-effective health savings account.

“Our new retirement benefits program also will help us attract and retain talent and address the needs of today’s changing workforce, which desires more portability and greater involvement in decisions affecting their financial futures,” asserted Jan Angell, vice president, 3M Compensation and Benefits, in the announcement.