Seeking to fill an informational void, the PBGC is attempting to ascertain how many employers have frozen their defined benefit pension plans and how many expect to do so.
Pending approval from the federal Office of Management and Budget, the PBGC will survey employers to determine how many pension plans have been frozen, as well as the reasons why employers have frozen their plans and whether they ultimately intend to terminate or unfreeze the plans.
Additionally, the PBGC will ask employers that have not frozen their plans whether they intend to do so in the future.
Obtaining this information, the PBGC says, will help the agency better forecast trends in the plans it insures. Long-term, pension freezes can dramatically reduce the premiums the PBGC collects from employers.
While there is no exact definition of a pension freeze, such moves typically refer to a cessation of benefit accruals for all or a portion of plan participants. In addition, new employees are not allowed to join the frozen plan.
Conducting the survey would come on the heels of pension freezes by several major employers. For example, giant retailer Sears Roebuck & Co., which has well over 200,000 enrollees in its pension plan, is phasing out the plan, effective Jan. 1, 2005.
New Sears employees and current employees under age 40 will be offered an enhanced 401(k) plan, while employees over 40 will have a choice of remaining in the defined benefit plan or moving over to the enhanced 401(k) plan.
Meanwhile, at Aon Corp., the world's second-largest insurance brokerage, all employees hired in the United States since Jan. 1, 2004, are being enrolled in a new defined contribution plan that complements an existing 401(k) plan. Aon is retaining its $1 billion defined benefit plan for employees hired before Jan. 1.
