Frozen Defined Benefit Pension Plans in March 2008
August 31, 2009
Many employers have opted to freeze their current defined benefit plan and provide an alternative. Data from the March 2008 National Compensation Survey on employee benefits indicate that a fifth of all private industry workers participating in a defined benefit plan are affected by a freeze.
Alternatives available to employees may include a new defined benefit plan, a new defined contribution plan, or an enhanced existing defined contribution plan.
As the number of defined benefit plans decreases and the number of frozen plans increases, there could be major negative implications for those workers in the later stages of their career, where plan contributions are often at their highest.
When a defined benefit plan is frozen, the employer may restrict entry into the plan and limit future contributions. The degree to which contributions and entry is limited will depend on the type of freeze. In some cases, an employee may stop accruing benefits in the event of a freeze, but the plan will continue in operation, protecting the benefits already accrued.
These data are from the Employee Benefits Survey. To learn more, see "Alternatives to Frozen Defined Benefit Pension Plans," by Scott F. Curtin in the August 2009 issue of Compensation and Working Conditions Online.
Bureau of Labor Statistics, U.S. Department of Labor, The Economics Daily, Frozen Defined Benefit Pension Plans in March 2008 on the Internet at http://www.bls.gov/opub/ted/2009/ted_20090831.htm (visited October 23, 2016).
Recent editions of Spotlight on Statistics
Workplace injuries and illnesses and employer costs for workers’ compensation
Workplace injury and illness data and the costs to employers for workers’ compensation in natural resources, construction, and maintenance occupations.
A look at the future of the U.S. labor force to 2060
Projected long-term trends in the growth, size, and composition of the labor force.
Union membership in the United States
Historical trends in union membership among employed wage and salary workers; union membership by a variety of demographic characteristics.
A look at healthcare spending, employment, pay, benefits, and prices
Spending on healthcare, current and projected employment in the industry, employer-provided healthcare benefits, healthcare prices, and pay for workers in healthcare occupations.
Self-employment in the United States
Trends in self-employment by various demographic and socioeconomic characteristics, including both the unincorporated and the incorporated self-employed, as well as data on paid employees who work for the self-employed.