8-KLeadership ChangesRegulation FDExhibits & Filings

FEDEX CORP 8-K Report, Executive Changes (Feb 27, 2007)

Filed February 27, 2007For Securities:FDX

Summary

FedEx Corporation (FDX) announced significant changes to its executive and employee retirement plans, effective June 1, 2008, and January 1, 2008, respectively. The company is transitioning its defined benefit pension plans (Pension Plan and Parity Plan) to a cash balance formula called the "Portable Pension Account" for future benefit accruals. Existing benefits accrued under the traditional formula will be frozen as of May 31, 2008. This move signals a shift in how retirement benefits will be calculated for a substantial portion of its workforce, including named executive officers. In addition to the pension plan changes, FedEx is enhancing its 401(k) defined contribution plans. Beginning January 1, 2008, the company will increase its matching contribution to 3.5% of eligible earnings, up from $500. Furthermore, to address limitations in tax-qualified 401(k) plans, participants, including executives, will receive additional "Portable Pension Account" compensation credits of 3.5% on earnings exceeding the federal compensation limit ($225,000 for 2007). These adjustments are aimed at retaining and incentivizing talent by offering competitive and adaptable retirement benefits.

Key Highlights

  • 1FedEx is shifting its defined benefit pension plans to a cash balance formula (Portable Pension Account) for future benefit accruals, effective June 1, 2008.
  • 2Benefits accrued under the traditional defined benefit pension plan formula will be frozen as of May 31, 2008.
  • 3The company is increasing its matching contribution to 401(k) plans to 3.5% of eligible earnings, effective January 1, 2008.
  • 4An additional 3.5% "Portable Pension Account" compensation credit will be provided on earnings above the tax-qualified 401(k) plan limit for eligible employees.
  • 5These plan changes apply to named executive officers as well as other eligible employees participating in the affected plans.
  • 6The announcement was made via an 8-K filing on February 26, 2007, with an accompanying press release dated February 27, 2007.

Frequently Asked Questions

FedEx is transitioning its traditional defined benefit pension plans to a cash balance formula called the 'Portable Pension Account' for future benefit accruals, effective June 1, 2008. Benefits earned up to May 31, 2008, under the old formula will be frozen and paid at retirement.

Starting January 1, 2008, FedEx will increase its matching contribution to 401(k) plans to 3.5% of eligible earnings. Additionally, a supplemental 'Portable Pension Account' credit of 3.5% will be provided on earnings that exceed the federal limit for tax-qualified plans, to ensure participants receive full benefit value.

The changes impact eligible employees, including named executive officers, who participate in the FedEx Corporation Employees' Pension Plan, the FedEx Corporation Retirement Parity Pension Plan, and the company's tax-qualified 401(k) plans.

The changes to the pension plans, including the adoption of the cash balance formula for future accruals and the freezing of existing benefits, are effective June 1, 2008. The enhanced 401(k) matching contributions and supplemental credits begin January 1, 2008.