General Mills Inc. will close its defined benefit pension plans to all American employees at the end of 2027, according to the company’s annual report.

At the end of May 2017, the pension plans had US$5.925 billion in assets and US$6.459 billion in liabilities, notes the report.

“The company will freeze the pay and service amounts used to calculate pension benefits for active employees who participate in the United States pension plans as of Dec. 31, 2027,” states the report. “Beginning Jan. 1, 2028, active employees in the United States will not accrue additional benefits for future service and eligible compensation received under these plans.”

Read: Postmedia benefits changes include closure of DB pension, EAP

It added these changes have already resulted in a US$130.9 million decline in the projected benefit obligation as of May 28, 2017, due to the decrease in expected future pensionable compensation.

The company — which also provides defined benefit pension plans to employees in Britain, Canada and France — began the process of winding down its U.S. defined benefit plan in June 2013 when it was closed to new salaried staff, notes the report. In January 2018, the plan will be closed to new non-union production employees.

In its annual report, General Mills notes future net income or expenses around its defined benefit pension and other post-retirement benefits will depend on future changes to discount rates, changes in health-care cost trends and other factors related to the populations participating in the plans.

Read: 2017 Top 100 Pension Funds Report: The evolution of DB pensions

Copyright © 2020 Transcontinental Media G.P. Originally published on benefitscanada.com

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