The pace of retirement plan changes among FORTUNE 100 companies is stabilizing, and a majority still offer pension plans to their new employees, according to an analysis by Watson Wyatt Worldwide, a global consulting firm. The analysis of retirement plan sponsorship among FORTUNE 100 companies found that 54 firms offer a defined benefit (DB) pension plan to newly hired salaried workers. Following an 11% decline between 2004 and 2005, the number of FORTUNE 100 companies sponsoring pension plans decreased by 5% in 2006 and 4% in 2007. The rate of change slowed after passage of the Pension Protection Act of 2006, which established a more supportive environment for both traditional and hybrid DB plans. But with proposed hybrid plan regulations not final until 2009, it may take several years to see the full effect of these developments for DB plans. "Thanks in large part to the pension reform legislation, the peak rate of replacing DB plans with defined contribution-only plans appears to be behind us," says Alan Glickstein, a senior retirement consultant at Watson Wyatt. "In fact, as companies evaluate what the new rules mean for them, we could very well see a renewed commitment to hybrid and other DB plans." Of the 54 DB pension plans sponsored by FORTUNE 100 companies, 28 are traditional plans and 26 are hybrid plans. Most companies that sponsor a DB plan also offer their new employees a defined contribution (DC) plan, and 46 firms have moved to a DC-only approach. "Companies are seeking innovative ways to reduce the risks and costs associated with their retirement plans while still providing attractive benefits," said Kevin Wagner, a senior retirement consultant at Watson Wyatt. "For some employers, that will mean offering an enhanced DC-only plan. Others, however, might opt for hybrids, given the combination of reduced volatility for employers and secure, portable benefits for employees."

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