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Who is in the American Red Cross pension plan?
The American Red Cross began its defined-benefit plan in 1936. As of spring, 2017, according to American Red Cross National Headquarters staff, there are 18,600 retirees, or survivors of retirees, taking pension benefits. There are another 9,500 members of the pension system who are not yet taking benefits. About 9,000 former employees gave up their pension rights in exchange for a one-time lump sum payment, in buyouts that were offered in 2013 and 2016.
Like many large employers in current times, Red Cross has moved away from its defined-benefit pension plan, in favor of a 401(k) defined-contribution program. The pension fund was closed to new employees in 2009, and for current employees, it was frozen in 2012 – that is, no more contributions were made, and no additional pension benefits accrued. So today, except for investment income, all of the funds in the pension plan flow outward to retirees; there is no longer a stream of regular employer contributions to the plan.
Even though the fund has been closed to new employees, and frozen for current employees, the fund will be around for a long time. Red Cross National Headquarters officials project that the fund will be paying out benefits through 2077!
In addition to the defined-benefit plan, and on the defined-contributions side, there are about 25,100 Red Cross employees or retirees with a 401(k) balance.
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