Talbots Inc. will freeze its two defined-benefit pension plans indefinitely as of May 1 in an effort to boost company cash flow, according to a Securities and Exchange Commission filing.
Participants will receive no further accruals under the defined-benefit pension plan or supplemental pension plan, which should yield cash savings of roughly $6 million for the current fiscal year, according to a news release.
On February 5, Hingham, Massachusetts-based Talbots announced it was suspending matching contributions to the company’s 401(k) plan while increasing health care contributions by employees. The company expects those two steps to result in roughly $7 million in savings during the current fiscal year, spokeswoman Julie Lorigan said.
Talbots’ defined-benefit pension plan had $110 million in assets as of February 2, 2008, according to its most recent annual report. The company had $159 million in its 401(k) plan as of December 2006, according to the 2009 Money Market Directory.
Filed by Douglas Appell of Pensions & Investments, a sister publication of Workforce Management. To comment, e-mail editors@workforce.com.
