Retirement plans: Gap between small & large firms shrinking
The disparity between the benefits offered by large firms and those offered by small and mid-sized firms seems to be shrinking like the polar ice caps.
In fact, 55% of the firms in the Fortune 100 now only offer employees defined contribution (DC) plans — 401(k), 403(b), etc. — instead of the more traditional defined benefit (DB) plans, such as a closed or frozen pension plan. These findings come from a recent Watson Wyatt (now Towers Watson) survey.
The numbers jumped up significantly from the 46% of Fortune 100 employers that offered defined contribution plans just a few years ago.
These findings are also notable because this marks the first time that a majority of Fortune 100 organizations are offering DC retirement plans.
Another trend that the study uncovered: An increasing number of Fortune 100 organizations are offering hybrid pension plans (account-based cash balance plans, etc.) instead of defined benefit plans.
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