Skip to main content

Defined Benefit Pensions: Plan Freezes Affect Millions of Participants and May Pose Retirement Income Challenges

GAO-08-817 Published: Jul 21, 2008. Publicly Released: Jul 21, 2008.
Jump To:
Skip to Highlights

Highlights

Private defined benefit (DB) pension plans are an important source of retirement income for millions of Americans. However, from 1990 to 2006, plan sponsors have voluntarily terminated over 61,000 sufficiently funded single-employer DB plans. An event preceding at least some of these terminations was a so-called plan "freeze"--an amendment to the plan to limit some or all future pension accruals for some or all plan participants. Available information that the government collects about frozen plans is limited in scope and may not be recent. GAO conducted a stratified probability sample survey of 471 single-employer DB plan sponsors out of a population of 7,804 (with 100 or more total plan participants) to gather more timely and detailed information about frozen plans. We have prepared this report under the Comptroller General's authority as part of our ongoing reassessment of risks associated with the Pension Benefit Guaranty Corporation's (PBGC) single-employer pension insurance program, which, in 2003, we placed on our high-risk list of programs that need broad-based transformations and warrant the attention of Congress and the executive branch. Frozen DB plans have possible implications for PBGC's long-term financial position. This report examines (1) the extent to which DB pension plans are frozen and the characteristics of frozen plans; and (2) the implications of these freezes for plan participants, plan sponsors, and the PBGC.

Full Report

GAO Contacts

Office of Public Affairs

Topics

Accrual basis accountingData collectionEmployee benefit plansEmployee retirement plansEmployeesFinancial analysisFinancial managementInvestment planningInvestmentsPension plan cost controlPensionsProgram evaluationRetirementRetirement benefitsRetirement incomeRisk assessmentRisk managementStatistical dataStrategic planningSurveys