The Markets April 23, 2009

Kimberly-Clark Freezes DB Plan, Adds 401(k)

Dallas, Texas-based Kimberly-Clark Corporation will freeze its defined benefit pension plan for non-union workers on December 31 and adopt a new 401(k) program.
Reported by

The company said in a U.S. Securities and Exchange Commission filing regarding the DB plan that:

  • no future compensation and benefit service will be accrued other than that called for in union contracts;
  • no future compensation and benefit service under the Supplemental Plans will be accrued;
  • all contributions to the Incentive Investment Plan and the Retirement Contribution Plan will be discontinued for future plan years other than provided by union contract;
  • alll credits to participant accounts will be discontinued under the Supplemental Retirement Contribution Program for future plan years.

The company also said in the filing that it would kick off the 401(k) as of January 1. The plan includes a 100% company match up to 4% and a discretionary profit-sharing payment of up to 6% annually, based on the company’s financial performance.

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Kimberly-Clark said it would also add a non-qualified supplemental plan benefit to the Supplemental Retirement Contribution Program.


Compliance April 23, 2009

Savings Recovery Act Introduced in House

Members of the U.S. House GOP’s Savings Solutions Group on Wednesday introduced the Savings Recovery Act, a bill designed to “help families protect what they have and begin to rebuild what they have lost.″
Reported by

The Group first revealed its proposed blueprint for the legislation in March (see “GOP Congressmen Offer Savings Proposal’).

A statement from the office of U.S. Representative Howard P. “Buck” McKeon (R-California) said the Savings Recovery Act would:

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  • Make it easier for Americans to save more for their retirement by increasing the contribution and catch-up limits for individuals and families.
  • Restore college savings by extending the existing SAVERs Credit to contributions made to 529 college savings accounts, effectively reducing by up to half the cost of a family’s contribution to the plan.
  • Increase retirement income by doubling the Social Security earnings limit from $14,160 to $28,320 and allowing more Americans to increase their income without being hit by the Social Security earnings penalty.
  • Provide tax relief for investors and seniors by immediately suspending the capital gains tax on newly acquired assets for the next two years, raise and index to inflation the amount of capital losses allowed against ordinary income to $10,000, and suspend taxes on dividend income through 2011.
  • Stabilize worker pensions and helping employers invest in the future by temporarily providing an increased glide path for recognizing losses and two additional years to resolve pension funding shortfalls.
  • Preserve employee-controlled 401(k)s by blocking efforts to wipe out 401(k)s entirely and replace them with government-run accounts.

More information is available here.

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