Former TI in Attleboro freezes pensions

ATTLEBORO, Mass. (WPRI) - Sensata Technologies, the former sensors-and-controls division of Texas Instruments spun off in 2006 by Mitt Romney's old company, will freeze its pension plan and scale back 401k contributions next month, WPRI.com has learned.

Sensata employees will no longer get pension credit for additional years of work or future raises after Jan. 31, with exceptions for initial vesting and early retirement eligibility, Sensata CEO Tom Wroe told employees last week in an email obtained by WPRI.com.

Sensata will also stop paying an extra 2% contribution to the 401k accounts of employees who chose not to participate in the pension plan, Wroe said. The company will continue to match employee 401k contributions up to 4% of their salaries, he said.

"I recognize that this is a disappointment for you," Wroe wrote in the email. He blamed the decision on "uncertainty in world economies" and falling demand from corporate customers, as well as federal pension contribution requirements.

Sensata was part of Texas Instruments until 2006, when it was taken private and renamed by a group led by the private-equity firm Bain Capital LLC, which was co-founded by Republican presidential candidate Mitt Romney. A spokeswoman for Sensata, which went public last year, declined to comment beyond the letter.

Romney left Bain seven years before its deal with TI that created Sensata, but the agreement has still drawn national attention as the former Massachusetts governor's opponents criticize the firm for laying off American workers.

Texas Instruments employed about 5,000 workers in Attleboro and Mansfield at its height before moving most of its manufacturing operations to Asia. Sensata now employs about 945 workers in the U.S., down from 1,585 in 2008, according to regulatory filings.

"Unfortunately, we are in the position where we needed to make some tough decisions to both maintain our financial metrics and continue to make the strategic investments in growth that are so important to our future," Wroe said in the email to employees explaining the pension plan freeze.

He cited statistics showing 40% of the 584 companies on this year's Fortune 1,000 list with a defined-benefit pension "have frozen at least one plan," including The Walt Disney Co., General Electric and Kraft.

"Freezing the Pension Plan reduces overall costs by limiting future liabilities and reduces the volatility of required contributions, which can fluctuate significantly because of changes in interest rates and investment results," Wroe said.

Ted Nesi ( tnesi@wpri.com ) covers politics and the economy for WPRI.com and writes the Nesi's Notes blog. Follow him on Twitter: @tednesi