Changes to defined benefit plans will slow considerably this year, with 72% of plans surveyed by Hewitt Associates saying they would not likely make any changes to their plans this year, compared to 41% in last year’s survey.
Changes to defined benefit plans will slow considerably this year, with 72% of plans surveyed by Hewitt Associates saying they would not likely make any changes to their plans this year, compared to 41% in last year’s survey.
Hewitt’s annual “Hot Topics in Retirement” survey of 190 corporate pension plans also showed that 30% plan to conduct an asset-liability study this year.
“Over the past several years, we’ve seen a significant number of companies make plan design changes — including freezing or closing their defined benefit plans — which is due, in part, to stricter funding rules and increased costs and cost volatility,” Alison Borland, Hewitt’s defined contribution consulting practice leader, said in a news release.
“This year, we see companies investigating alternate methods of improving pension plan management, which mitigates financial and other risks that can be created by these benefits.”
Also in the survey, 66% of defined contribution plan sponsors said they would improve communication with employees on participation; 64%, on diversification and fund usage; and 58%, on contribution levels.
DC plans are increasingly turning to automatic enrollment, the survey found, with 44% planned this year vs. 36% in 2006. Of plans that don’t offer automatic enrollment, 30% said they would “very likely” offer it in 2008, while another 27% said they would “somewhat likely” to make the move.
