Michelin makes changes to U.S. employee retirement plan
Michelin North America Inc. recently revised its employee retirement plan. The plan applies to all active, union-free employees in the United States.
The changes, listed below, were made "to help manage our long-term obligations, strengthen our position in an increasingly competitive business environment and continue to deliver excellent retirement benefits to its employees," according to the company.
1. On Jan. 1, 2017, all Michelin employees will participate in a defined contribution plan, the Michelin Retirement Account Plan (MRAP). As a result, no Michelin employee will accrue additional pension benefits in the Michelin Retirement Plan (defined benefit plan) beyond Dec. 31, 2016. Instead, all Michelin employees will accrue benefits through the MRAP.
2. The company will open another retirement choice window in the second quarter of 2007 to provide eligible employees the opportunity to evaluate whether to begin participation in the Michelin Retirement Account Plan (MRAP) next year. Employees may choose to wait until they are automatically enrolled in the MRAP on Jan. 1, 2017. This decision is entirely up to each individual employee.
3. Michelin will remove the 35-year service limitation on the MRAP, effective immediately. The 35-year service limit will remain, as required by federal regulation, a provision of the MRP plan. A disability benefit will be added to the MRAP for current and future participants to provide a disability benefit equivalent to that in the MRP plan.
Michelin says it always has maintained funding for its pension plan according to federal pension regulations. The company intends to continue making the necessary contributions to keep the MRP properly funded as these federal requirements continue to evolve, even after employees stop accruing benefits in the plan after Dec. 31, 2016.