NEW YORK — Competitors aren't champing at the bit to launch new hybrid pension plans now that Mercer Human Resource Consulting has introduced its Retirement Shares Plan.
The reason: lack of demand.
Ari Jacobs, a consultant at Hewitt Associates, Lincolnshire, Ill., said plan sponsor interest in hybrid retirement plans continues, but is not increasing. The demand is not great enough for other consultants to follow Mercer by creating new plans, he said.
Stephen Mirante, retirement practice leader at Watson Wyatt Worldwide, Washington, said there's a need for alternative plan designs, but he's unsure if sponsors will be quick to sign on.
"There are clearly more plans that have moved to a hybrid plan model" over the past few years, but many are hesitant because of the uncertainty with regard to regulations. "These plans don't fit into the current rule," he said.
Watson Wyatt officials believe hybrid defined benefit plans could be a great way to manage costs associated with traditional defined benefit plans and could keep sponsors from switching to a defined contribution platform, Mr. Mirante said.
Still, Mercer executives are touting their hybrid, saying it's aimed at plan sponsors that want to retain a defined benefit structure, with added flexibility and reduced risk.