Federally backed mortgage giants Fannie Mae and Freddie Mac are pulling the plug on their pension plan at the end of the year at the urging of its federal oversight agency, according to a memo the companies sent to staff Friday morning.
Company officials had frozen pension contributions earlier this year but decided to eliminate the programs altogether. The actions are being taken at the urging of the Federal Housing Finance Agency, which oversees Fannie and Freddie.
"FHFA has directed us to make these changes to manage the cost of the retirement benefits at a more predictable rate and to limit long-term liabilities," the memo said. The change takes effect Dec. 31.