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Most Firms Committed to Keeping Plans
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. These are the findings of two new studies by Watson Wyatt Worldwide, a leading global consulting firm.
An analysis of pension plan sponsorship among FORTUNE 1000 companies shows that the share of plan sponsors freezing their plans dropped from 7 percent in 2006 to 4 percent in 2007. New freezes reached their highest levels in 2006, when 42 additional firms on the FORTUNE 1000 list had frozen plans.

            Pension Plan Sponsorship Among FORTUNE 1000 Firms

                                                                 Cumulative
                                                                   number
                                                                   of plan
                                                Percentage of     sponsors
                                                plan sponsors      with a
                  Number of                      freezing or     frozen or
  FORTUNE      defined benefit   New freezes or  terminating     terminated
  list year     plan sponsors    terminations*      plan           plan

  2007                638             25             4%             138
  2006                627             42             7%             113
  2005                627             26             4%              71
  2004                633              6             1%              45

  * Some due to new companies joining FORTUNE 1000 with a frozen or
    terminated plan

"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. "With less regulatory uncertainty and funding volatility better under control, the environment is now a more positive one for pension plan sponsors."
Additionally, a Watson Wyatt study of 300 organizations with pension plan assets of more than $100 million found that 59 percent of companies that have a defined benefit plan open to new hires have made a formal decision to keep their plans open. The remainder have not indicated that they've made a formal decision about their plans.
"While many companies are committed to keeping their pensions, they may not be committed to their current plan design," Wagner said. "Options such as hybrid pension plans are likely to gain in popularity as companies consider different features for their plans."
Watson Wyatt (NYSE:WW) is the trusted business partner to the world's leading organizations on people and financial issues.
For more information: http://www.watsonwyatt.com/

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