Almost three-quarters of companies with large corporate defined benefit plans say theres no way they would consider launching a new DB plan, according to a GAO report.
The remaining 26% of the respondents surveyed by the Government Accountability Office said they might consider launching a new DB plan if regulatory and funding requirements were eased.
Responding sponsors did not appear to be optimistic about the future of the DB system, according to the report, Defined Benefit Pensions: Survey Results of the Nations Largest Private Defined Benefit Plan Sponsors.
The report, based on responses from 44 companies that sponsor a total of 169 plans, also found that 81% had modified the formula for computing benefits for one or more of their DB plans. The survey reported that 28% of the plans covered in the survey were under a freeze limiting some or all future pension accruals for some or all plan participants.
The web-based survey, done for Sens. Charles Schumer, D-N.Y., and Robert Casey Jr., D-Pa., was available to plan executives from Dec. 17, 2007, to Oct. 31, 2008.
Nearly everyone completed it before the (financial) meltdown, Barbara Bovbjerg, GAO director, education, work force and income security issues, said in an interview.
Its reasonable to believe that if we did the survey today there would be more pessimism from the sponsors, she said.