Fedex 401(k) window opens in July
Employees can choose new pension-less plan
Fedex employees will have a window later this year to decide between their current 401(k) plan and the new, pension-less plan, the company said Wednesday.
In the new 401(k) plan, Fedex will provide an 8% match if an employee contributes 6% of salary. Currently, the plan’s match is 3.5% with a 6% contribution, but that includes the pension plan.
Current employees will be given a one-time option to continue participating in the current plan or to switch over to the new plan.
“The selection window for Retirement Choice eligible employees is July 12 through August 25,” Fedex said in a statement.
The new plan will take effect January 2022, one year later than what Fedex
initially said when it announced the change in November 2019.
“The delay is in response to the COVID-19 pandemic and the significant uncertainty and volatility in the current
market,” Barb Wallander, Fedex Express senior vice president of human resources, said in a memo to employees last year. “These near-term conditions have created an environment where many of us may not be prepared to best evaluate our current household financial situation in order to make this important one-time personal decision.”
Fedex said in a March regulatory filing that employees will have greater flexibility and the company will reduce its long-term pension costs under the new program. The change “will not have a material impact on current or nearterm financial results,” it added.
The change affects non-union employees at U.s.-based Fedex operating companies. Retirees are unaffected. Since 2020, new Fedex employees have been unable to join the company’s pension plan.
Fedex is one of many companies that has moved away from pensions over the years, reducing risk and expense on the employer’s side. A Fedex executive said in 2019 that only 22% of Fortune 50 companies and 11% of transportation companies were still offering pensions, citing company research.
Max Garland covers Fedex, logistics and health care for The Commercial Appeal. Reach him at max.garland@commercialappeal.com or 901-529-2651.