today announced proposed changes to its U.S. and U.K. defined benefit pension plans to maintain competitive retirement benefits for its employees while reducing future pension costs. Changes to the pension plans will not affect pension plan benefits earned by participants prior to the effective date of the changes.
Effective January 1, 2007, future benefits in the Company’s U.S. defined benefit pension plan will be calculated based on a “career average pay” formula instead of a “final average pay” formula. The change is anticipated to affect approximately 11,000 active employees covered by the U.S. plan. The U.S. plan was closed to new entrants effective January 1, 2004.
For its U.K. defined benefit pension plans, the Company is proposing to cease crediting future benefits relating to salary and service, subject to trustee approval and member consultation. The proposed change would affect approximately 1,700 active employees and is anticipated to take effect during the first half of 2007. Subject to approval of the trustees, it is proposed that the future pension provision will be provided under the defined contribution section of the Aon U.K. Pension Scheme. The U.K. defined benefit plans were closed to new entrants effective January 1, 1999.
See full Press Release.
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