Benefits

More New Salaried Workers at Big Firms Get Defined-Contribution Plans

By Staff Report

May. 26, 2010

The largest public companies continue to steadily replace defined-benefit plans with defined-contribution or hybrid plans for new salaried employees, according to a 25-year analysis of Fortune 100 companies by Towers Watson.


Fifty-eight of the Fortune 100 companies offered only DC plans to new salaried employees this year through May 12, according to a news release from the firm. This tally includes “changes made this year and announcements of future plan changes,” the release said.


Five years ago, 37 offered only DC plans to new workers, while in 1985, 10 companies offered only DC plans to new employees.


Also, the total number of Fortune 100 companies offering DB plans (traditional or hybrid) to new salaried employees dropped to 42 this year from 90 in 1985, the news release said.


Towers Watson found that the number of Fortune 100 companies offering traditional pension plans to new salaried employees dropped sharply—to 17 this year from 89 in 1985, the news release said. However, the hybrids reached their peak at 34 in 2002 and in 2004; this year, 25 were hybrids, including cash-balance plans.


“The movement toward account-based plans appears to be steady and strong as companies shift away from traditional pensions,” Kevin Wagner, senior retirement consultant at Towers Watson, said in the release. “And while most of the shifting has been toward 401(k) plans, we are seeing employer interest in cash-balance plans, too, as the provisions of the Pension Protection Act, which creates a more friendly environment for these plans, begin to take effect.”


Towers Watson used internal surveys and information as well as public information sources—including proxies, 10-K filings and annual reports—to analyze corporate retirement plan trends from 1985 through May 12, Ed Emerman, a spokesman for Towers Watson, wrote in an e-mail response to questions.


Filed by Robert Steyer of Pensions & Investments, a sister publication of Workforce Management. To comment, e-mail editors@workforce.com.

Stay informed and connected. Get human resources news and HR features via Workforce Management’s Twitter feed or RSS feeds for mobile devices and news readers.

What’s New at Workforce.com?

blog workforce

Come see what we’re building in the world of predictive employee scheduling, superior labor insights and next-gen employee apps. We’re on a mission to automate workforce management for hourly employees and bring productivity, optimization and engagement to the frontline.

Book a call
See the software

Related Articles

workforce blog

Benefits

What is Earned Wage Access (EWA)? A Few Considerations

Summary Earned wage access (EWA) programs are an increasingly popular way for employees to access their...

benefits, earned wage access products, payroll, time and attendance

workforce blog

Benefits

EEOC says that employers legally can offer incentives to employees to get vaccinated in almost all instances

If you’re an employer looking to get as many of your employees vaccinated as possible, you can rest eas...

ADA, CDC, COVID-19, EEOC, GINA, pandemic, vaccinated

workforce blog

Benefits

Fixing some common misconceptions about HIPAA

Ever since the CDC amended its COVID-19 guidance to say that the fully vaccinated no longer need to wea...

COVID-19, health care, HIPAA, human resources, wellness