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State of the Sector: Pension & Retirement Benefits

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1. Opinions Mixed on the Future of Cash-balance plans
Rep. John Boehner's bill would make the plans legal.

2. Few Employers Ready to Make Managed Accounts Automatic
Many employees don't invest in lifecycle funds properly.

3. Making 401(k)s Last by Offering Annuities
Motorola and BHP Billiton are among the companies considering this option.

4. Halting Defined-benefit Plans

5. 401(k)s: How Much Employers Are Matching
Most employers offer a “fixed match,” such as 50 cents for each dollar an employee puts in.

6. Time Is Ripe for 401(k) Sponsors to Revisit Pacts
As defined-contribution plans continue to become the retirement savings vehicle of choice for employers, competition among the record keepers servicing these plans is expected to increase.

7. Dear Workforce: How Do I Get Younger Associates to Enroll into Retirement Plans?
The earlier they start, the less they have to spend.

8. IBM Strives for the Security of Defined-Benefit Programs as It Shifts Focus to 401(k)s
Managed accounts, automated features and annuities are aimed at ensuring that employees have enough to last after retirement.

9. Lifecyle Funds Can Help Companies Mitigate Risk and Boost Employee Savings
The funds, which rebalance based on the investor’s retirement age, are gaining popularity. But getting workers to use them correctly has its own set of problems.

10. Benefits & Compensation
Exchange ideas about health plans, retirement, work/life benefits, and employee assistance. (Please note that this forum is dedicated to workforce-management professionals only, and not for employees.)

Halting Defined-benefit Plans

A chart showing how many companies are freezing or terminating their pensions.
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Recent Watson Wyatt Worldwide research shows that the percentage of Fortune 1,000 firms freezing or terminating their defined-benefit plans has increased rapidly. In 2004, 11 percent, or 71 companies, froze or terminated their plans, up from 7 percent, or 45 companies in 2003. Nearly two-thirds of Fortune 1,000 companies sponsor a define-benefit plan.
	Defined-benefit sponsors	Sponsorship rate	Frozen or terminated plans	Rate of freezing or termination	Hybrid-plan sponsorship

2004	627	63%	71	11%	16%

2003	633	63%	45	7%	18%

2002	624	62%	39	6%	16%

2001	638	64%	34	5%	16%
Source: Watson Wyatt Worldwide

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