The number of large U.S. companies offering new salaried employees only a defined contribution (DC) plan, such as a 401(k) plan, continued to increase this year, according to an annual analysis by Towers Watson (NYSE, NASDAQ: TW), a global professional services company. The analysis found that only three in 10 of these companies currently offer a defined benefit (DB) pension plan to newly hired salaried workers.
The Towers Watson analysis found that 70 companies in the Fortune 100 currently offer only a DC plan to new hires, compared with 67 companies at the end of last year and 63 companies at the end of 2010. Meanwhile, 11 companies continue to offer a traditional DB plan, versus 14 companies at the end of 2011, while 19 companies continue to offer a hybrid pension plan, such as a cash balance plan, the same number as at the end of 2011.
Fortune 100 companies’ retirement plan sponsorship, 1985 – 2012*
Type of retirement plan
Defined contribution only
*Numbers indicate plans offered to new salaried hires at the end of each year. The “Today” column includes changes implemented between January 1, 2012, and June 30, 2012.
The analysis also noted that so far in 2012, there have been fewer retirement plan changes relative to 2011. Three companies switched from DB plan offerings for new salaried employees to an all-DC retirement environment. Additionally, one company converted its traditional DB plan to a hybrid plan.
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