Form 5500 Data Confirms Trends in Private Pensions

February 2, 2006 ( - The latest Issues in Brief from the Center for Retirement Research at Boston College shows that Form 5500 Data from the Department of Labor confirms the trends that have been reported on for private pensions in recent years.

According to the Brief the trends noted in the Form 5500 data from 1990 – 2000, and more currently released 2001 – 2003 data, are:

  • Contributions to Defined Benefit Plans Tripled
  • Pension Assets Rebounded
  • Cash Balance Plans Grew
  • Shift to Defined Contribution Plans Continued

The Brief authors point out that a combination of growing asset values and regulatory constraints allowed defined benefit plan sponsors to make little or no contributions to pensions in the late 1980’s and early 1990’s. After 2000, as the stock market dropped and interest rates fell, assets in pension funds decreased while liabilities continued to grow. The 5500 data showed that pension plan contributions grew from about $30 billion annually in the period from 1980 – 2000 to around $45 billion in 2001 and up to $100 billion in 2002 and 2003.

Coupled with the increase in contributions, the recovery of the stock market helped pension assets rebound by 2003 to levels comparable to that of 1999.

According to the 5500 data, cash balance plans grew from about 600 plans with 100 or more participants and more than $250 billion in assets in 1999 to more than 1,000 plans with assets totaling more than $530 billion in 2003. The authors note in the brief that litigations against cash balance plans has caused their growth to virtually halt since that time.

In 2002, for the first time, aggregate assets accumulated in defined contribution plans surpassed that of assets in defined benefit plans. The most recent Form 5500 data shows that more than 60% of workers with retirement funds are covered only by a defined contribution plan, while only around 10% are covered by a defined benefit plan only and the rest are covered by both. In 1992 the numbers were approximately 30%, 25%, and 45%, respectively.

The brief and supporting data can be found here .