Kroger merges four pension funds
CINCINNATI — Kroger on Thursday announced that four of the UFCW/multi-employer pension funds to which the company contributes will merge into a new fund, effective Jan. 1. This new arrangement is expected to reduce Kroger's annual pension contribution expense and will secure the pension benefits of more than 65,000 Kroger associates.
“Given the challenging environment that exists for pension plans today, we are pleased to have reached an agreement that provides a meaningful future benefit for Kroger associates who participate in these plans,” stated Mike Schlotman, Kroger's CFO. “The unique characteristics of these plans, coupled with our strong financial position and today's low interest rate environment, give us the ability to contribute to the new fund in a manner that we expect to produce significant future savings.”
Pending market conditions, favorable discussions with the rating agencies and the approval of three remaining UFCW locals, Kroger expects to contribute approximately $650 million to the new fund in January 2012. The plans cover more than 65,000 Kroger associates from 14 UFCW local unions. Kroger associates represent 92% of the total active participants in the four funds, which was a key factor that facilitated this arrangement, Kroger stated.