The number of U.S. companies considering closing or freezing their defined benefit pension plans has almost tripled since 18 months ago, a new survey finds.
Of 153 large U.S. employers with pension plans surveyed by Hewitt Associates Inc., Lincolnshire, Ill., 31% said they were more likely to consider closing their plans today, compared to 11% that said so in 2008. And 50% of those in this year’s survey said they were more likely to consider freezing their plans to existing participants, up from just 17% in 2008.
Hewitt also found most U.S. companies are moving to reduce their plans’ overall risk.
In response to the economic turmoil, almost 40% have cut their equity exposure to manage risks for their plans, Hewitt reports. Its survey also found 66% have adopted funding policies designed to maintain an 80% funded level for their plans. And 83% expected to make additional contributions to their plans.
Hewitt also found plan sponsors are 5 times more likely than last year to consider delegating their entire pension plan investment policy to professional advisors–20%, this year, compared to 4% that said so in 2008.