Watson Wyatt Worldwide has reported new analysis showing the largest U.S. companies continued to shift from traditional pensions to 401(k) plans in 2005. Specifically, it found that only 37% of Fortune 100 companies offered a traditional pension plan to new hires in 2005, down from 42% in 2004, 50% in 2002, and 89% in 1985. At the same time, the percentage of companies offering workers only a 401(k) or other type of defined contribution plan increased to 36% in 2005, up from 25% in 2004 and 17% in 2002.
In light of these results, Watson Wyatt Worldwide urges Congress to act on long-standing funding and regulatory issues affecting pensions. At the same time, the firm’s experts say employers should get a true reading of their plans’ cost structure and of related workforce management issues before making plan changes.
Source: News Release Watson Wyatt (May 4, 2006)