Fewer companies offer DB plans to new employees
By Gary Linnell
ProWEB Wire (Industry News)
The number of large U.S. employers offering a defined benefit pension plan to new salaried employees declined again, while the number offering only defined contributions plans increased, according to a recent study by Towers Watson & Co.
The study found that 42 percent of Fortune 100 companies offered a defined benefits plan to new salaried employees, down from 45 percent in 2009 and 83 percent in 2002.
Despite the decline in traditional defined benefit plays, hybrid plans, or defined benefit plans that combine elements of defined benefit and defined contribution plans, remain largely unchanged.
For example, 17 of the companies polled offered a traditional defined benefit plan to new employees in May, down from 20 in 2009, and 49 in 2002. However, 25 Fortune 100 companies offered hybrid plans -- often in the form of cash balance plans -- the same number seen during the past two years.
Meanwhile, the number of companies offering only defined contribution plans rose to 58 percent, compared to just 17 percent in 2002.