CUNA Mutual Announces Cash Balance Conversion

As part of a plan to shave $50 million in expenses this year, CUNA Mutual Group announced the company will move from a defined benefit pension plan to a cash balance pension plan for non-union employees.

The Wisconsin State Journal reports that CUNA vice president Jim Buchheim said the company’s 401(k) match will not be suspended. “Part of the reason we’re taking this action is that a cash balance is a more affordable retirement plan for us,” Buchheim said, according to the Journal. “And yet even with that (change), we’ll still be one of less than half the large companies in the country who offer employees both a 401(k) match and a pension plan. We think we still offer very competitive retirement benefits.”

The change will save the company money because it will result in smaller employer contributions per employee. Under the new pension plan, the company will make annual contributions equal to 4% of salary for employees during their first nine years of employment, 5% for those with 10 to 20 years, and 6% after 20 years of employment, the news report said. All new hires since January 2002 already are in the cash-balance pension plan.

In addition, the company notified 73 employees that their jobs would be cut in 30 days, and announced project reductions and eliminations, less contracted work, and reduced company travel.