Large companies froze or terminated pension plans at a sharply accelerated rate in 2004, even while the funding levels of those plans continued to improve, according to analysis by Watson Wyatt. The consulting firm found that 11% of Fortune 1000 companies that sponsor pension plans had a frozen or terminated plan in 2004, up from 7% in 2003 and 6% in 2002. According to the report, 63% of Fortune 1000 companies currently sponsor a pension plan.
Roughly half the companies that terminate their plans fall off the Fortune 1000 list the year after termination, indicating that the decision to end a pension plan may be closely tied to weak financial performance, according to the analysis.
