NBJ PR Wire

Pension Plan Freezes Slowing, Watson Wyatt Finds

Release Date: July 23, 2007

Contact: Janice Andrews

Most Firms Committed to Keeping Plans

WASHINGTON, July 23, 2007 - The rate of pension plan freezes among FORTUNE 1000 firms has slowed, and the majority of companies with defined benefit plans are committed to keeping them. These are the findings of two new studies by Watson Wyatt Worldwide, a leading global consulting firm.

An analysis of pension plan sponsorship among FORTUNE 1000 companies shows that the share of plan sponsors freezing their plans dropped from 7 percent in 2006 to 4 percent in 2007. New freezes reached their highest levels in 2006, when 42 additional firms on the FORTUNE 1000 list had frozen plans.

"Undoubtedly some companies will freeze their pension plans in the future, but it appears that trend has peaked," said Kevin Wagner, a senior retirement consultant at Watson Wyatt. "With less regulatory uncertainty and funding volatility better under control, the environment is now a more positive one for pension plan sponsors."

Additionally, a Watson Wyatt study of 300 organizations with pension plan assets of more than $100 million found that 59 percent of companies that have a defined benefit plan open to new hires have made a formal decision to keep their plans open. The remainder have not indicated that they've made a formal decision about their plans.

"While many companies are committed to keeping their pensions, they may not be committed to their current plan design," Wagner said. "Options such as hybrid pension plans are likely to gain in popularity as companies consider different features for their plans."

About Watson Wyatt Worldwide
Watson Wyatt (NYSE: WW) is the trusted business partner to the world's leading organizations on people and financial issues. The firm's global services include: managing the cost and effectiveness of employee benefit programs; developing attraction, retention and reward strategies; advising pension plan sponsors and other institutions on optimal investment strategies; providing strategic and financial advice to insurance and financial services companies; and delivering related technology, outsourcing and data services. Watson Wyatt has 6,000 associates in 31 countries and is located on the Web at www.watsonwyatt.com.
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