Published Wednesday, January 06, 2010
ELCA publisher ends defined benefit pension plan
The Associated Press - MINNEAPOLIS
The publishing house of the Evangelical Lutheran Church in America is ending a traditional retirement plan for current employees and retirees.
KSTP-TV reports that Augsburg Fortress sent notices to about 500 employees and retirees last week saying it will terminate its defined benefit retirement plan March 5. The company's defined contribution program for current employees, similar to a 401(k), with a company match, is not affected.
The company says as of Dec. 31, the plan's retirement benefit obligations totaled about $24 million. The plan's assets were only about a third of that. If the company kept paying out monthly benefits, the plan would run out of money in five years.
Most people in the plan will receive some type of lump sum payment.
Minneapolis-based Augsburg Fortress blames the money problems on fewer book sales, shrinking ELCA congregations and increasing competition on the Internet but says the main reason was the market downturn in 2008 and 2009.
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KSTP-TV reports that Augsburg Fortress sent notices to about 500 employees and retirees last week saying it will terminate its defined benefit retirement plan March 5. The company's defined contribution program for current employees, similar to a 401(k), with a company match, is not affected.
The company says as of Dec. 31, the plan's retirement benefit obligations totaled about $24 million. The plan's assets were only about a third of that. If the company kept paying out monthly benefits, the plan would run out of money in five years.
Most people in the plan will receive some type of lump sum payment.
Minneapolis-based Augsburg Fortress blames the money problems on fewer book sales, shrinking ELCA congregations and increasing competition on the Internet but says the main reason was the market downturn in 2008 and 2009.
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