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Benefits July 23, 2007
Study: DB Freezes Slowing Down
WASHINGTON, July 23, 2007 - The rate of pension plan
freezes among FORTUNE 1000 firms has slowed, and the majority
of companies with defined benefit plans are committed to
keeping them, new Watson Wyatt research has found.
Reported by Fred Schneyer
A Watson Wyatt news release said an analysis of pension plan sponsorship among FORTUNE 1000 companies shows that the share of plan sponsors freezing their plans dropped from 7% in 2006 to 4% in 2007 with a total 138 of 638 DB plans frozen in 2007.
New freezes reached their highest levels in 2006,
when 42 additional firms on the FORTUNE 1000 list had
frozen plans, according to the consultant.
Additionally, a Watson Wyatt study of 300 organizations
with pension plan assets of more than $100 million found
that 59% of companies that have a defined benefit plan
open to new hires have made a formal decision to keep
their plans open. The remainder apparently hasn’t
decided, the second study found.
“Undoubtedly some companies will freeze their pension
plans in the future, but it appears that trend has
peaked,” said Kevin Wagner, a senior retirement
consultant at Watson Wyatt, in the news release. “With
less regulatory uncertainty and funding volatility better
under control, the environment is now a more positive one
for pension plan sponsors.”
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