The number of Fortune 1000 companies planning to freeze or terminate their defined benefit pension plans rose 60% in the year ended April 30, according to a recent Watson Wyatt study.
The study shows that 113 companies have or plan to have a tleast one terminated or frozen pension plan, up from 71 in2004. There are currently 627 Fortune 1000 companies have a defined benefit plan.
The study also highlighted the fact that 49 companies have or will close its defined benefit plan to new hires, up from 25 in 2004. Overall, 162 companies had at least one plan that was frozen, terminated or closed to new hires as of April or announced plans to take such action in the future, compared with 96 in 2004.
The results of the study show that lawmakers should take advantage of the opportunity the pension reform bill provides to rework current pension law, the firm said. "Congress has an opportunity to create an environment in which employers will be able to sponsor pensions and make sure employees have adequate retirement income," said Sylvester Schieber, Watson Wyatt's director of U.S. benefits. "If it fails to take advantage of that opportunity, both employ-ers and employees will suffer."