With Dow leaving behind its pension plans, the local steelworkers union is trying to get a better idea of what this means for its workers.
Dow announced on March 4 that it would no longer use defined pension plans, switching all employees to a contribution 401(k) savings plan. However, President of United Steelworkers Local 12075 Kent Holsing said the union still requires information to have a better understanding of what effects this change will have on employee benefits.
Dow’s plan is to switch to the 401(k) savings plans while allowing employees who currently have pension plans to keep their accumulated benefits, which will be available to them upon retirement.
The changes to pension affect just U.S. employees for now, but Dow’s intention is to transition from the defined benefit plans to market competitive savings plans in countries where these plans exist.
Holsing said Dow will introduce 401(k) enhancements at the beginning of 2022, freeze pension plans on Dec. 31, 2023, and offer another 401(k) enhancement on Jan. 1, 2024.
The union requested information from Dow, including existing pension plan documents, proposed plan documents, and any pension changes. Once the union has this information, Holsing said it will be easier to negotiate with the company.
Dow has asked for a deadline extension twice for giving the union information regarding employee plans and finances, with the recent extension having expired on June 30, Holsing said. However, as of July 6, he said the union has yet to receive the information and he assumes the company will ask for another extension request.
He added that Dow requested a confidentiality agreement be signed in order for the union to receive confidential information. This and the delays are to be expected due to the content and amount of information being requested, according to Holsing.
Kyle Bandlow, corporate media relations director for Dow, said the company requested additional time to fully meet the requests of the union.
Bandlow also said the changes align with the market and are consistent with what most other companies have already implemented.
“Dow’s goal is to offer a comprehensive package that enhances the total wellbeing of our employees and their families,” Bandlow said in an email.
But Holsing does not expect many new benefits to employees due to a 401(k) being tied to the stock market, and he said the current pensions will be ending at a time when many long-time employees would have started to see an accelerated growth in their pensions.
“We would be surprised if there is any net or positive financial impact to someone’s retirement security as a result of these changes, regardless of what plan they are on,” Holsing said. “But again, until we get the information, we cannot see that with 100% certainty.”