Sears Canada plans to make changes to its pension plan and cut post-retirement benefits, which will save the company about $25 million by the second half of 2008.
The retailer will amend its pension plan by introducing a defined contribution(DC)component effective July 1, 2008.
Contributions by associates towards defined benefits will be discontinued and associates will keep all pension benefits accrued up to and including June 30, 2008 in the existing defined benefit(DB)component of the plan.
“This pension redesign will keep Sears Canada in step with the way retirement plans have evolved in Canada while still ensuring that a competitive plan exists for our associates that is in alignment with the Canadian retail industry,” says Dene Rogers, the retailer’s president and CEO.
In addition, to align itself with other Canadian companies in the retail sector, Sears Canada will no longer provide post-retirement medical, dental and life insurance benefits for associates who have not achieved the eligibility criteria for these benefits by December 31, 2008.
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