Wholesale changes are in store for both pension and 401(k) plans, according to a survey of 140 financial executives by Prudential Financial. Nearly half of the execs at companies with pension plans said their firms were considering freezing or terminating their pension plans in the next two years. Seventeen percent have already closed their DB plan to new entrants, and 27% said they are likely to do so in the next two years.
Forty-five percent said their pension plan performance has had a substantial impact on their company's financial performance in the past year, and 57% said reducing the volatility of their plans' funding status is a high priority. As a result, 74% said their companies are undertaking a risk assessment of their pension plans, 66% are adopting a more conservative asset allocation strategy, and 60% will be increasing contributions.