NCR Corp. is offering lump-sum payments to about 7,000 of its former employees in exchange for their pensions.
The Duluth company's voluntary offer, open from Sept. 6 to Oct. 20, is available to past employees who haven't yet retired but are vested — or eligible for future retirement benefits — under its pension plan. The 30,000-employee company makes ATMs, credit card terminals and other transaction-handling equipment.
NCR’s offer follows a number of earlier moves over the past decade to cut its pension plan risks and costs, including earlier lump-sum offers.
Many companies have retreated from offering traditional pensions over the past decade because they risk having to pay promised retirement benefits for decades even if their pension fund investments do poorly or retirees live longer than projected.
UPS recently disclosed plans to freeze pensions of many of its non-union employees.
In 2014, to cut part of such risks, NCR also purchased a group annuity plan to transfer about $160 million of its pension liabilities tied to 4,500 retirees to an outside firm, according to Pensions & Investments, a trade magazine.
In the latest move, NCR said the former employees will be able to choose from a number of pay-out options. They include rolling their lump sums into IRAs; taking cash payouts, or taking monthly annuity payments starting in December. Former employees can also opt to do nothing and keep the current terms of their pension benefits.
Financial experts often counsel people to beware potential tax and penalty pitfalls from taking cash for their pension benefits.
