The number of Fortune 1000 companies intending to freeze or terminate a pension plan increased 60% in the year ended April 30, according to a new study by Watson Wyatt Worldwide released today. Of the 627 Fortune 1000 companies that sponsored a pension plan, 113 had announced their intention to freeze or terminate a plan in the year, compared with 71 in the previous year.
Also, the number of companies intending to close a plan to new hires doubled to 49 from 25 the previous year, according to the study. In addition, 162 companies had at least one pension plan that was frozen, terminated or closed to new hires as April 30, compared with 96 in the previous year.
The new analysis should spur Congress to take steps that would encourage companies to retain pension plans, according to a statement from Watson Wyatt. "The traditional pension system, which has served Americans well for decades, continues to play a valuable role in ensuring employees can retire when they and their employers want them to," Sylvester J. Schieber, Watson Wyatt director of U.S. benefits, said in the statement. "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. If it fails to take advantage of that opportunity, both employers and employees will suffer."