Note: Several of our readers have pointed out that the statement “Rival United Parcel Service Inc. closed its pension plan to new workers in 2016.” is inaccurate: the closure applied only to non-union employees.
FedEx Corp. is overhauling its retirement program as it adjusts to broader changes in the workplace.
The company is closing its pension plan to new U.S. hires starting next year, the WSJ’s Paul Ziobro reports, joining the ranks of large U.S. companies phasing out guaranteed retirement benefits. The issue has cast a financial cloud over the company, with a pension deficit of nearly $4 billion and obligations of $28.9 billion at the end of its fiscal year ended May 31, 2019.
FedEx is part of a shrinking group of U.S. companies with traditional pension plans, and the company told its workers that just 22% of Fortune 50 companies and 11% of transportation companies offer pensions to new hires. Rival United Parcel Service Inc. closed its pension plan to new workers in 2016.