Friday, January 6, 2006
From USA Today.com:
IBM announced [yesterday] that it will freeze its pension plan, the latest in a series of major companies to move away from offering benefits that provide retired workers with monthly checks.
The freeze will take effect in 2008. No accrued benefits will be lost, but employees will no longer accrue benefits after 2007. Instead, IBM says, it will beef up 401(k) contributions for its 125,000 U.S. employees.
The rest of the story can be found here.
This is yet another example of the increasing trend of employers of moving away from defined benefit plans (where pension benefits are guaranteed at retirement) to defined contribution plans (where only contributions to pension plans are guaranteed). My previous post of this trend can be accessed here.
Expect to see more of the same as 2006 moves on.