Carpenter Technology Corp. to freeze traditional pension plan
WYOMISSING – Carpenter Technology Corp. said Wednesday it will freeze benefits accrued to eligible employees of its General Retirement Plan effective Dec. 31.
GRP is a defined benefit pension plan that includes about 1,900 domestic salaried and hourly employees.
Carpenter’s operations include its Dynamet subsidiary at 195 Museum Road in Arden, which manufactures titanium bar, wire and coil products.
The company said in a news release affected employees will be moved to a 401(k) plan in effect for eligible employees since 2012, when GRP was closed to new entrants.
Carpenter also announced plans to voluntarily contribute $100 million to GRP within the next 60 days, which will further bolster the funded position of the plan.
As a result of these changes, the company said it expects to reduce between $40 million and $45 million in its annual net pension expense inclusive of estimated incremental defined contribution plan costs.
“During the past year, we launched numerous initiatives to aggressively manage our business and promote sustainability in the face of ongoing marketplace volatility across select end-use markets. To further strengthen our long-term financial condition and remain competitive in today’s marketplace, we are modifying our approach to how we partner with employees to help them prepare for retirement,” said Carpenter President and Chief Executive Officer Tony Thene.
“Our decision to transition from a traditional defined benefit pension plan to a more typical defined contribution plan reflects our goal to provide our employees a competitive retirement plan option while aligning the majority of our workforce under a common retirement plan. At the same time, our $100 million voluntary contribution to the GRP underlines our commitment to supporting our many loyal employees who have contributed to Carpenter’s success and leadership position.”
Carpenter Technology is a leading producer and distributor of premium specialty alloys, including titanium alloys, powder metals, stainless steels, alloy steels and tool steels used in aerospace, transportation, medical and energy markets.