Time & Attendance
By Staff Report
Apr. 17, 2009
Forty-four percent of companies with defined-benefit plans have closed their plans to new participants, 3 percent are planning to do so in the next 18 months, 10 percent are considering it, and 43 percent have no such plans, according to a Towers Perrin survey.
Sixty-nine percent of companies with defined-benefit plans have no intention of making any changes affecting current employees.
Among companies offering defined-contribution plans, less than 10 percent have suspended or plan to suspend company matching contributions, 19 percent are considering it, and the rest of those surveyed have no plans to do so, according to the survey.
Roughly 40 percent are making investments in financial education for defined-contribution plan participants, which could be in response to a decline in participation in defined-contribution plans and an increase in loans and hardship withdrawals; 43 percent saw an increase in loans and withdrawals from defined-contribution plans, and 38 percent reported a drop in participation.
“Employees are exacerbating the damage created last year by the capital markets,” Mike Archer, Towers Perrin chief actuary and a principal in the firm’s retirement practice, said in an interview.
Archer noted that defined-contribution plan participants are also becoming more conservative and moving more toward fixed-income investments, “creating the ever-famous buy high and sell low combination.”
The survey of 480 officials at large and midsize U.S. companies was conducted in February.
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