Pension Plan Freezes, Terminations, and Other Changes

This article uses a microsimulation model to estimate how freezing all remaining private-sector and one-third of all public-sector defined benefit (DB) pension plans over the next 5 years would affect retirement incomes of baby boomers.

With the economy becoming weaker, many state and local governments will be facing fiscal challenges in the months and years ahead. These challenges will undoubtedly prompt governments to carefully examine all aspects of their budgets, including pension costs for state and local workforces.

In an attempt to identify factors that led specific companies to freeze their plans, this paper explores the relationship between the probability that a plan was frozen and characteristics of the plan, the firm, and the industry.

This brief examines 17 healthy companies that have recently frozen their traditional pension plans. Individual fact sheets for each company can be found here.