Underfunded Anheuser-Busch pension plan restricts certain forms of payments to salaried employees
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Anheuser-Busch Cos. - part of Anheuser-Busch InBev - has an under-funded pension plan for salaried employees, thanks to a round of retirement packages last year and the eroding stock market.
That news came courtesy of an Oct. 8 letter to pension participants and beneficiaries from James Brickey, Anheuser-Busch’s vice president of people.
The pension plan is funded below 80 percent, a ratio calculated by dividing the plan’s assets by its liabilities (future pension payments owed to participants.)
What’s the big deal? Under federal law, any plan with a funded status below 80 percent is subject to certain restrictions. Those include restrictions on accelerated forms of payment, such as lump-sum payouts.
In Anheuser-Busch’s case, the lump sum form of payment cannot be paid in full at one time. The lump sum will be limited to fifty percent of the amount that would be payable without the restriction.
Participants affected by the changes have some options. They can get their entire payment in the form of a lifetime annuity; Receive half of their benefits under a restricted form of payment and the remainder as a lifetime annuity; Get half their payment now, but defer the rest until a later date when the restrictions may not apply; Defer the entire benefit until a later date.
The restrictions became effective Oct. 1. “During an uncertain economy, it is difficult to make accurate predictions regarding how long the restrictions will be in effect,” Brickey wrote.
The company stressed that the restrictions apply only to specific forms of payment, and not to the amount of benefits accrued.
(3 votes, average: 3.33 out of 5)
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Jeremiah McWilliams is a native Virginian who came to the Post-Dispatch in early 2007 to cover beer and other consumer products. He previously covered manufacturing for the Virginian-Pilot newspaper in Norfolk, Va. He is a graduate of Washington and Lee University. 
“Vice President of peoples”. What is wrong with this world.
no honey thatz u why is u acting stupid
This has nothing to do with an “uncertain economy”. Debt is being paid back faster than anyone expected. You can’t blame the economy on one hand while you’re doing so well in it on the other.
Killing the pension has been planned since the beginning. Go back and look at some of the early announcements from Personnel (they don’t deserve to be called HR, let alone “People”).
It’s going to get even better when they reset everyone’s compensation next month to “80% of average”.
i wonder if brickey is sleeping well at the lake this week.
The notice on the pension plan is a result of federal law just vas explained in the notice. Once funds drop below 80% federal law kicks in and restricts limits on lump sum and accelerated payments. This is re-evaluated on a annual basis and once the economy recovers along with the Dow, lump sum payouts will be back. This was no conspiracy.
The salary of those who are re-banded will not be cut. It will only affect a persons salary range. If you are re-banded and your current salary is above the top end you will not get a annual salary increase without special approval. So it’s not as bad as some may think. Hourly wages will not be touched.
Early this year a statement was issued listing excess payments made in 2008 to the pension before the buyout. This was when they announced that InBev was freezing the pension in 2010. It appeared that InBev was taking this 2008 contribution and applying it to 2009. So it seems that the old AB did some overfunding to account for all the ERPs, but InBev used it to count as their contribution. So the people who were hoping to be terminated so they could at least get their pension don’t even have that option anymore.
Recently employee engagement surveys were distributed to measure the climate at InBev - apparently they were the lowest InBev has ever seen — Brito wants the scores brought up by the end of the year — his question - “why is morale so low?” — Duh! — Wait till the next survey after those of us left have found that our pension is disappearing while Brito’s bonus is doubled.
Within IT, where scores were low, management is supposed to be getting input from employees - unfortunately many comments and concerns are being excluded from the presentations to Odilon in IT or ignored - apparently the same management contributing to the low morale is responsible for providing suggestions on how to improve it.
brito wonders why the moral is low. look in the mirror. You cannot treat people the way u do, change things in your ” I am better than you” attitude. Everyone over 30 wants out and now this?
To SoCal - Perhaps not a conspiracy, just a legal maneuver (or greed) — after all, the company did extremely well, surpassing expectations, and is expected to contribute to the pension plan. Apparently InBev “retired” all of these people without due consideration to its effect on the pension plan - as a matter of fact, they were not even aware of the WARN act and wound up keeping people on the payroll after they were dismissed due to lack of notice. The draw-down on the pension plan is a result of company actions which directly affected its balance, not the economy.
Some of us saw that the pension plan was underfunded last January when a statement was issued disclosing the assets and liabilities - just because InBev wasn’t audited until recently, does not mean they have not been aware of it all along. Please note that the notice is required if the pension plan drops below 80% down to 60% — I’ll lay bets its closer to 60% funded than 80%. The company supposedly has 7 years to recoup the funding, so it is responsible. They are just “taking out a loan” for now, I guess. Lump sum payments will be back when the pension fund is adequately funded - not necessarily when the dow rebounds.
Regarding the rebanding - “If you are re-banded and your current salary is above the top end” — The person responsible for submitting my “new” job description and banding doesn’t even know me - I never got to review my new job description to see if it indeed included the complete skill set I’m expected to apply. — So I could be rebanded as a job not requiring or listing the skills I’m expected to have. As far as hourly wages, there are a number of technical positions that according to wage/hour should not be considered exempt from overtime even if salaried - how many of those will be checked and reclassified?
To All:
You may want to familurize yourselves with the Pension Protection Act of 2006: http://www.PensionProtectionAct.com or google it!
I would bet money that the company plan has no obligation for funding with the exception of federal law. Having said that, as the funding status of your plan depleats the plan trustees will be forced by federal law to develope a plan to improve funding!
The first thing the Trustees should do is ask the company for additional funds to keep your plan above the 80% funded status. Should the company decline, which you can assure yourselves Inbev will do, the the Trustees are then forced to cut and or reduce benefits as they are doing to you now.
No doubt that Inbev knew when they were handing out the early retirements to employees they knew they were reducing the funded liability of the plan and that once the funded liability reached a certain point as it now has, the Trustees would be forced to reduce benfit payments to retirees!
Futhermore, Imbev new that because they were under know obligation other than federal law to fund the plan that benefit cuts were on the horizon. Unless Inbev decides to fund the plan above 80%, or the market brings the plan above 80% funded status, benefits will continue to be reduced! Standby people!
The Teamsters Union recently negotiated language that stats: in addition to any negotiated contributions to their plans that Inbev will contribute any additonal funds necessary to keep the plans funded above the 80% funding status. However, both plans are currently under funded and its time for Inbev to buck up. Inbev is now trying to reach and agreement with the Union Trustees that will allow them and additional six months to put the money into the plans. Should Union Trustees agree to that, they should be removed from office. As someone said before, charging employees and retirees for their healthcare, cutting jobs, wages and retirement benefits while shaking down bonuses for themselves, its unbelievable!