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How to Know When Your Defined Benefit Plan Is Ready to Prepare for Termination

June 4, 2019

Via: HR Hero
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Employer-sponsored private-sector defined benefit (DB) plans have been on the decline for many years as U.S. employers have shifted to defined contribution (DC) retirement plans. Just 17% of private-sector employees had only a DB plan or both a DB and DC plan as of March 2018, according to the Bureau of Labor Statistics (BLS). Meanwhile, 51% are enrolled in a DC plan. (Thirty-two percent have neither.)

Among the private-sector DB plans still in existence, different stages in their lifecycles can be identified. As of March 1, 2017, according to other BLS data:

  • 63% of employees in pension plans were in active plans;
  • 25% were in soft-freeze plans (closed to new hires); and
  • 12% were in frozen plans.

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