Avery Dennison Corp. will discontinue its pension plan effective Sept. 28, according to a Securities and Exchange Commission filing by the company.
The plan is underfunded by an estimated $240 million. Glendale-based Avery Dennison will borrow $200 million in cash to contribute to the plan and aims to fully fund the remaining balance before transferring the pension liability to one or more yet-to-be named insurance companies by 2019.
There will be no change in benefit amounts for the approximately 11,200 current participants in the plan. The company estimates that the total non-cash charge for terminating the plan will be between $575 million and $600 million.
The company made the SEC filing on Wednesday. Shares of Avery Dennison (AVY) rose 50 cents, or a fraction of a percent, on Thursday to close at $102.24 on the New York Stock Exchange.