Nearly 40% of 200 large defined benefit plan sponsors would freeze their plans within one year if legislative and regulatory support is not forthcoming, according to a survey by Hewitt Associates. Another 21% would switch their plans to defined contribution plans, while 17% would maintain their current DB plans but offer defined contribution plans for new employees. Uncertainty over interest rate relief and cost volatility are the driving force behind the moves, according to Hewitt.
Also, 31% said they would freeze their cash balance or other hybrid plans and provide benefits solely under a defined contribution plan if current legal, regulatory and accounting issues are not resolved in the next year.
