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Honda dropping pension plan

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Citing a need to cut costs, Honda announced in a letter to employees it is eliminating its pension for new employees and reducing benefits for the people already with the company, The Columbus Dispatch reported Tuesday.

Current employees will retain all of the benefits they have previously accumulated.

Instead of a defined-benefit pension, new employees will be offered a 401(k) savings plan, a version of which has previously been offered as a supplement to the pension. The switch will occur in January.

The changes will “balance associate benefits with what the company needs to secure its future,” said Tetsuo Iwamura, Honda’s top executive in North America, in a letter to employees obtained by The Dispatch.

Honda has about 13,700 workers in Ohio, most of whom are in central Ohio. It has about 28,000 employees in the United States, plus 4,000 retirees.

The drop in benefits is “a concern for all employees,” said one longtime Honda worker who asked that his name not be printed because he was not authorized to speak. “It should be a concern for everyone who’s thinking of working there.”

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