New Member Promotion >>> Save $15 and get a SHRM tote!
Giving applicants with criminal backgrounds a fair chance at employment can be good for business.
Plus all the HR resources you need to be more efficient and effective this fall!
Apply for the SHRM Certification Exam and begin advancing your career.
Learn how to make the business case for diversity, October 25-27.
70% of large U.S. companies now offer only 401(k) plans to new salaried employees
The number of large U.S. companies that offer new salaried employees only a 401(k)-type defined contribution (DC) plan continued to increase in 2012, according to an annual analysis by consultancy Towers Watson.
Only 30 of the 100 largest U.S. companies offered a traditional or hybrid defined benefit (DB) plan to newly hired salaried workers in 2012. Meanwhile, 70 Fortune 100 companies offered only a DC plan to new hires, compared with 67 companies at the end of 2011 and 63 companies at the end of 2010.
Fortune 100 Retirement Plan Sponsorship
Plans offered to new salaried hires
(end of year)
(end of year)
Traditional defined benefit pension plan
Hybrid defined benefit plan (e.g., cash balance plan)
401(k)-type defined contribution plan only
Source: Towers Watson
As of mid-2012, three Fortune 100 companies had switched from offering DB pension plans to new salaried employees to an all-defined contribution retirement environment. Additionally, one Fortune 100 company converted its traditional DB plan to a hybrid plan.
“The ongoing shift from DB to DC plans due to cost and cost volatility is helping to create a next generation of retirement-age workers who may not be able to afford to retire when they would ideally like to,” said Kevin Wagner, a senior retirement consultant at Towers Watson, in a media statement.
Alan Glickstein, another senior retirement consultant at Towers Watson, counters: “Younger workers are finding DB and hybrid plans more appealing than DC plans.” He noted that unlike DB plans, DC plans are characterized by rapid vesting in employer contributions, employee ownership of accounts and plan portability
“At a time when workforce demographics are changing and employees are growing increasingly concerned about their retirement security, employers find themselves in a position of having to carefully evaluate which type of retirement plan makes the most sense for them and their employees,” Glickstein said.
Stephen Miller, CEBS, is an online editor/manager for SHRM.
You have successfully saved this page as a bookmark.
Please confirm that you want to proceed with deleting bookmark.
You have successfully removed bookmark.
Please log in as a SHRM member before saving bookmarks.
Your session has expired. Please log in again before saving bookmarks.
Please purchase a SHRM membership before saving bookmarks.
An error has occurred
Recommended for you
Choose from dozens of free webcasts on the most timely HR topics.
SHRM’s HR Vendor Directory contains over 3,200 companies