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U.S. markets recover from steep losses
NEW YORK, May 22 (UPI) -- More U.S. companies have frozen their workers' pension plans this year than in all of 2008, a human resources research group said.
The firm, Watson Wyatt, said 20 companies have frozen their plans this year. In addition, a majority of companies have cut back to offering new hires only one retirement plan option -- a 401(k) styled "defined contribution" plan -- for the first time, USA Today reported Friday.
With the average pension plan's value plunging 27 percent last year, pension account obligations now outweigh the sizes of the accounts. In 2007, pension plans were valued at 109 percent of their liabilities. By the end of 2008, that number had dropped to 79 percent, Watson Wyatt said.
Lockheed Martin said earnings dropped 8.7 in the first quarter with pension cost increases rising faster than sales.
"The cost of that is jobs, a reduction in capital expenditures, a reduction in benefits and, unfortunately, that includes plan freezes," Dena Battle, director of tax policy for the National Association of Manufacturers, told the newspaper.
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