Defined Benefit Plans Slow Their Slide
Traditional pension plans are being preserved in strong, competitive industries like utilities, energy and big pharma.
By Fran Hawthorne
Corporate defined benefit pensions may be coming off the endangered species list.
Not that traditional lifetime pensions will once again be the nations predominant type of corporate retirement program; no one predicts that.
But a new survey from the New York-based consulting firm Towers Watson shows clear signs that traditional pensions have lost as much ground as theyre going to lose and are now at a stable plateau. Of the employers that still enroll new hires in some sort of defined benefit plan admittedly, a minority of the respondents 68 percent said they had made a formal decision to keep offering the plan for the next two to three years.
Athough two or three years may not seem much of a commitment, Mike Archer, a senior retirement consultant in Towers Watsons Parsippany, N.J. office, points out that the plans have already survived two recessions in the past decade, as well as the general trend away from pensions. If these companies havent closed or frozen them after all that, and if the companies dont change them in the next three years, I dont know what it would take to change them, he says.....