Implementation of the Pension Protection Act of 2006 and new pension accounting rules will spur many companies to consider adding cash-balance and other hybrid plans in 2007, according to a news release from Watson Wyatt Worldwide. Consultants at the firm also predicted that pension plans will continue to consider ways to better hedge long-term pension liabilities, while more employers will also consider alternative investments such as private equity, hedge funds, infrastructure and real estate in the new year.
"There's good news for pensions as the number of pension plan freezes slows and funding continues to improve," said Alan Glickstein, Watson Wyatt senior retirement consultant, in the news release. "After years of regulatory uncertainty and high volatility, plan sponsors are once again offering their employees a much more predictable future. And with the new plan design and investment options available, we can expect employers to continue assessing how to best match their plans with the company's long-term goals."