Hybrid Pension Plans Gain Among Large U.S. Companies.Even as more companies offer defined-contribution pension plans defined-contribution pension plan A pension plan in which an employer's periodic payments into the plan, rather than eventual retirement benefits to employees, are specified. , nearly a third of the Fortune 100 companies now offer employees so-called so-called adj. 1. Commonly called: "new buildings ... in so-called modern style" Graham Greene. 2. "hybrid" plans, an increase from 22 hybrids for the same group in 1998, according to according to prep. 1. As stated or indicated by; on the authority of: according to historians. 2. In keeping with: according to instructions. 3. a study by consulting firm Noun 1. consulting firm - a firm of experts providing professional advice to an organization for a fee consulting company business firm, firm, house - the members of a business organization that owns or operates one or more establishments; "he worked for a Watson Wyatt Worldwide, Bethesda, Md. Hybrid pension plans are defined-benefit plans Defined-Benefit Plan An employer-sponsored retirement plan for which retirement benefits are based on a formula indicating the exact benefit that one can expect upon retiring. Investment risk and portfolio management are entirely under the control of the company. in which employees' benefits are expressed in terms of immediate lump-sum payments instead of as annuities after retirement. The study also found that the number of firms among the Fortune 100 without a defined-benefit plan has increased even more sharply over the same two-year period. "The recent shift to hybrid pensions, while clear, is less pronounced than many thought," said Eric Lofgren, director of the benefit consulting group at Watson Wyatt. "In contrast, the shift among some large firms to defined contribution is a surprise." Lofgren said this shift is a response to the increased regulatory complexities that govern pension plans. "Some employers seem to have concluded that the administrative hassles of sponsoring a pension plan are so large that the only way they can win is by not offering a defined-benefit plan at all," he said. The study found that 32 of the companies offer hybrid pension plans, up from just one company in 1985. |
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