Mueller Co. to terminate retirement plan for contract employees

Springfield-based stainless steel manufacturer Paul Mueller Co. (OTC: MUEL) announced plans to terminate its retirement plan for contract employees.

The company intends to apply for approval in the next few months with the IRS, which typically takes about a year to process such requests, according to a news release.

At the end of the IRS process, the affected participants in the plan would receive a lump sum payment or a monthly annuity payment provided by an insurance company.

Mueller Co. Chief Financial Officer Ken Jeffries said via email that approximately 111 active employees and 453 former employees are impacted by the decision. Contract employees, he said, are those represented by the International Association of Sheet Metal, Air, Rail and Transportation Workers union.

"Both plans have been frozen since 2010/2011," he said of the contract and noncontract retirement plans, noting they cost about $700,000 annually in premimums and audit and actuary fees. "We intend to terminate the contract plan first as it is the smaller of the two plans. The company will fund the plans so the assets equal the plan’s obligations before terminating the plans."

Mueller Co. officials expect the company will contribute $4 million-$6 million toward the contract employee retirement plan termination, according to the release. Additionally, the termination is projected to impact net income to the tune of $15 million-$16 million.

As of Dec. 31, the contract retirement plan represented $23.5 million of the nearly $100 million in benefit obligations at the company.

Mueller Co. recently reported third-quarter net income of $980,000, a reversal from a net loss of roughly $1 million a year earlier, according to past reporting.