The shift to so-called hybrid pension plans by larger employers appears to be slowing – and perhaps responding to different motivations, according to new analysis from Watson Wyatt Worldwide.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. Shifting Priorities?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.3Plansponsor.comLSE To Probe Savings Industry in Europe
Researchers at the prestigious London School of Economics (LSE) will kick off a five-year research project into the state of savings rates and pension programs across Europe. UBS Global Asset Management is funding the effort.According to a report on the IPE newswire, the project will examine the problems of an aging population and effective retirement schemes – considering the impact of government money, employer involvement, and the worker’s own savings.In particular, LSE and UBS say the study will focus on three pension themes:
- pension fund management including the differences in structure and challenges facing both defined benefit and defined contribution plans as well as performance and risk measurement,
- household savings trends including the different forms of savings programs across Europe, and
- public and legal pension policies