State:
Free Special Resources
Get Your FREE Special Report. Download Any One Of These FREE Special Resources, Instantly!
Featured Special Report
Claim Your Free Cost Per Hire Calculator
This handy calculator lets you plug in your expenses for recruiting, benefits, salaries, and more.

Graphs automatically generate to show you your annual cost per hire and a breakdown of where you are spending the most money.

Download Now!
May 06, 2002
Momentum Toward Hybrid Pensions is Slowing
The
For a Limited Time receive a FREE Compensation Market Analysis Report! Find out how much you should be paying to attract and retain the best applicants and employees, with customized information for your industry, location, and job. Get Your Report Now!
pace at which large companies are making the switch to so-called hybrid pension plans appears to have slowed considerably, according to a new analysis by the consulting firm Watson Wyatt Worldwide.

Thirty-three percent of the Fortune 100 companies offer employees hybrid pension plans, a slight increase from 32 hybrids for the same group in 2000. Fifty percent currently offer a traditional defined benefit plan, down from 52 over the same two-year period, Watson Wyatt found.

"As the conversion to hybrid pensions has drawn attention from Congress over the past two years, the price tag for these conversions has escalated," says Eric Lofgren, director of the benefits consulting group at Watson Wyatt. "The companies that have recently adopted hybrid plan designs are mainly those that want to facilitate a cultural change or for whom a traditional career-long employment model is simply no longer realistic - not companies looking to generate cost savings."

Today, 33 percent of the companies in the Fortune 100 offer hybrid pension plans. That is up from just one company in 1985. At the same time, the number of companies in the Fortune 100 offering only a defined contribution plan has risen from ten companies during the 1980's through 1998, to 17 today.

Lofgren notes that some employers may be holding off on plan conversions as they await further clarification of the legal status of hybrid plans, in the wake of recent litigation.

"The recent slowdown in the trend toward hybrids also supports the notion that no one plan design is right for every company," he says. "Predictions by some that almost all large employers would abandon traditional plans in favor of hybrid plans and/or defined contribution-only approaches simply aren't coming true. The U.S. retirement system remains a mosaic where employers adopt different plan designs to meet varying business objectives and workforce needs.

"The question for the future is whether this latest analysis shows that we're approaching a plateau in the percentage of hybrids, or whether we are at an inflection point and will soon see the trend shift toward a return to traditional designs as the working population ages," says Lofgren.
Featured Free Resource:
Cost Per Hire Calculator
   
   
 
 
Twitter  Facebook  Linked In
Follow Us
CT-WEB06
Copyright © 2016 Business & Legal Resources. All rights reserved. 800-727-5257
This document was published on http://Compensation.BLR.com
Document URL: http://compensation.blr.com/Compensation-news/Benefits-Leave/ERISA/Momentum-Toward-Hybrid-Pensions-is-Slowing/