As it has for all company practices, the Board of Directors initiated a thorough review of all U.S. benefits programs to be sure that they are appropriate now that we are a much smaller, E&P company. We considered value to employees, attractiveness to recruits and cost.
Our analysis showed that our peers, and many companies outside of our industry, have moved away from traditional final average pay pension plans like ours to plans that are similar to the Hess Cash Accumulation Formula Pension Plan. Also known as cash balance pension plans, these plans are typically easy to understand because the earned value is visible from day one and the money can be taken with you when you leave the company. Offering this new formula to employees hired on or after January 1, 2017, will save millions of dollars over time. More importantly, it positions Hess to reaffirm and strengthen its commitment to existing employees (hired before January 1, 2017) to provide a pension benefit based on the Traditional Formula while providing a sustainable pension benefit to new and future employees (hired on or after January 1, 2017) under the Cash Accumulation Formula.