US retailer Kroger is set to merge four pension funds to save money.
The decision came after a deal with the United Food and Commercial Workers International union (UFCW) and will affect Kroger workers who are members of 14 UFCW local unions in 15 states, primarily in the Midwest and south, the company said.
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The plan will protect the benefits of employees and new workers by pay increases, with benefits proportionate to salary levels, and will provide a more secure and stable pension fund.
UFCW International president Joseph Hansen said yesterday (15 December): “In a volatile financial environment, this plan represents a long-term solution for a secure retirement for our hard working members who have chosen a career in the retail food industry.”
Members of the 14 UFCW local unions are in the process of confirmed the new plan, the company said. Over 197,000 UFCW members work in Kroger stores across the US.
Barclays Capital analyst Meredith Adler said: “This agreement provides a number of benefits, most importantly to limit risk: for Kroger it controls the future risk related to pension contributions and for the union workers it reduces the risk that their plans will become so underfunded that automatic benefits’ cuts go into effect. It also cuts Kroger’s future pension expense.”
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