A third of the companies in the Fortune 100 offer employees hybrid pension plans, a slight increase from 32% of the same group in 2000. In 1985 just one of the Fortune 100 firms offered a hybrid plan.
On the other hand, half now offer workers a traditional defined benefit pension plan, also down slightly from 52 over the same two-year period, according to the analysis.
While most of those firms also offer a 401(k), the number of Fortune 100 firms offering just a 401(k) plan now totals 17, up from 10 in 1998.
‘As the conversion to hybrid pensions has drawn attention from Congress over the past two years, the price tag for these conversions has escalated,” according to Eric Lofgren, director of the benefits consulting group at Watson Wyatt. ‘The companies that have recently adopted hybrid plan designs are mainly those that want to facilitate a cultural change or for whom a traditional career-long employment model is simply no longer realistic — not companies looking to generate cost savings.”
Lofgren notes that some employers may be holding off on plan conversions as they await further clarification of the legal status of hybrid plans in the wake of recent litigation.