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Tag >> defined benefit plans
US corporate pension plans fell to their lowest funding level since BNY Mellon Asset Management began tracking this data in 2006.
The funded status of the typical defined benefit plan dropped 5.6 percentage points to 71.3 percent at the end of August.
Employers with underfunded defined benefit (DB) pension plans can receive billions of dollars in temporary pension funding relief as a result of legislation recently signed into law, according to a new analysis by professional services company Towers Watson.
Under the Preservation to Access to Care for Medicare Beneficiaries and Pension Relief Act of 2010, employers can elect to amortize funding shortfalls for any two plan years between 2008 and 2011, over a 15-year period, or make interest-only payments for two years, followed by seven years of amortization.
US companies have undergone a big shift in how they are structuring retirement benefits packages for new employees in order to reduce cost and risk, according to a study by consultancy Towers Watson.
The study, which encompassed 642 US companies and data from 1998 to 2008, analyzed changes to defined benefit (DB), defined contribution (DC), retiree medical and retiree life insurance plans. It showed that companies across a range of industries are shifting from defined benefit to defined contribution plans, and are reducing overall benefits to new salaried employees.
It is another case of the glass being half empty or half full, depending upon where you sit.
Towers Watson points out that since the global financial crisis hit in September 2008, 18 percent of those who responded to its recent survey have either reduced or suspended the matching contributions to their 401(k) plans.
The number of large companies offering traditional defined benefit (DB) pension plans continues to decline, as they steadily march toward extinction.
Towers Watson now counts just 17 of the Fortune 100 companies still offering DB plans, down from 20 in 2009 and exactly half the total of five years ago.
If the recent "no" Say- on- Pay votes at Motorola and Occidental Petroleum indicate anything, it's that shareholder activism and populist ire regarding executive compensation have real legs. The majority of shareholders at those companies rejected proposed pay packages in a non-binding vote. But those decisions are only the tip of the iceberg, at least as far as changes to executive comp go.
In fact, over the last 24 months, public and shareholder pressure has led one in three Fortune 500 companies to change their executive pay plans, according to Doug Frederick, head of Mercer's Executive Benefits Group, who was quoted recently in Plansponsor.com. And, in case you were wondering, those changes generally haven't involved increases.
The global stock markets may have come roaring back last year. But, those responsible for their company's defined benefit pension plans are not exactly relaxing, given the overall volatility in the stock and bond markets.
According to a recent survey, executives are still very concerned about the overall volatility of their plan's funded status as well as improving the plan's funding levels.
Every day or so we get another nugget of data that suggests the economy is slowly, but erratically, recovering.
Today's kernel: 80 percent of companies that suspended or reduced their company match in their 401(k) plan in 2009 are planning to restore it in 2010, according to a new study from Hewitt Associates.