3M Pension Plan

The 3M ERIP operates as a defined-benefit cash-balance plan in which each participant's benefit is expressed as a hypothetical account balance accumulating pay credits and interest credits per the plan document. The benefit is distributable as a single lump sum (calculated using average daily rates on 30-year U.S. Treasury securities and applicable mortality tables) or as a monthly annuity. The plan was closed to new hires as of 2009 (Portfolio II closure). Remaining eligible non-union participants continue to receive cash-balance credits through December 31, 2028, the announced freeze date.

This is general educational information about how the plan's formula works, not a calculation of your individual benefit. Your actual benefit depends on your service, pay history, and the plan terms in effect during your employment.

On June 13, 2024, 3M announced the purchase of a group annuity contract from Metropolitan Tower Life Insurance Company (Met Tower Life), a MetLife subsidiary, transferring approximately $2.5 billion in defined-benefit pension obligations and related assets for approximately 23,000 U.S. retirees and beneficiaries (about 60% of ERIP retiree participants). Met Tower Life began paying and administering benefits for the transferred group effective October 1, 2024. The contract was purchased entirely from ERIP trust assets; no additional corporate cash was required and monthly benefit amounts were unchanged. 3M recognized a non-cash pre-tax settlement charge of approximately $0.8 to $0.9 billion in Q2 2024.

In a pension risk transfer (PRT), an employer transfers some or all of its pension obligations to an insurance company through a group annuity contract. If your benefit was transferred, your monthly payment generally stays the same, but the company paying it changes, and PBGC insurance is replaced by state insurance guaranty association coverage. For this plan, the counterparty was Metropolitan Tower Life Insurance Company (a MetLife subsidiary) (2024).

When exactly will the 3M pension stop accruing benefits for active employees?

3M announced on January 8, 2024 that it will freeze benefit accruals for non-union U.S. employees effective December 31, 2028. Until that date, eligible non-union participants continue to earn cash-balance credits in the ERIP. Union employees are not subject to this freeze and continue accruing under their collective bargaining agreements. Current retirees and participants with vested benefits are not affected by the freeze.

Did 3M transfer pension obligations to an insurance company?

Yes. In June 2024, 3M transferred approximately $2.5 billion in ERIP obligations for about 23,000 U.S. retirees and beneficiaries, roughly 60% of ERIP retiree participants, to Metropolitan Tower Life Insurance Company (Met Tower Life), a MetLife subsidiary. Effective October 1, 2024, Met Tower Life began paying those retirees directly, with monthly payment amounts unchanged. Affected retirees were notified in June 2024.

Can I take my 3M ERIP benefit as a lump sum?

Yes. The 3M ERIP offers a lump-sum distribution calculated using average daily rates on 30-year U.S. Treasury securities and applicable mortality tables. This lump sum may be rolled directly into an IRA or qualified plan tax-deferred, or received as a taxable distribution (subject to mandatory 20% federal withholding). Monthly annuity options, including 50%, 75%, and 100% joint-and-survivor forms, are also available. Participants whose benefits were transferred to Met Tower Life should contact MetLife for their distribution options.

Is my 3M pension protected by the PBGC?

Most single-employer defined benefit pensions are insured by the Pension Benefit Guaranty Corporation (PBGC), a federal agency. If a covered plan terminates without enough money to pay promised benefits, the PBGC pays benefits up to a legal maximum that varies by age. Benefits that have been transferred to an insurance company through a pension risk transfer are no longer PBGC insured and are instead backed by state guaranty associations.

Should I take my 3M pension as a lump sum or an annuity?

There is no single right answer. The decision depends on your health and life expectancy, your other retirement assets, whether you need to provide for a survivor, and the interest rate environment that sets the lump sum value. Our lump sum versus annuity guide walks through the trade-offs in detail.