The Rebirth of Pensions

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Trending Now: Defined Benefit Plans?

Total rewards is a pendulum. New benefits emerge, while older and little-used ones are phased out. Annual salary hikes come and go, depending on the economy. The same often goes for bonuses and other perks.

Now, the latest point of conversation among total rewards experts is about one of the oldest benefits offerings: pensions.

IBM announced a shocking benefits twist late last year: It was ending its 401(k) match for its roughly 300,000 employees and switching to a defined benefit plan with no employee contribution—essentially a pension plan.

While pensions have lost ground in recent years to 401(k) plans, experts say they may be ready for a comeback of sorts. Not only are employers thinking about adding or unfreezing pensions, they are also considering modernizing and diversifying the accounts to make them more attractive and flexible for employees.

John Lowell, a partner with consulting firm October Three in Woodstock, Ga., said that while the IBM news might push momentum further, employers were already beginning to look again at defined benefit plans.

"I do think there is going to be somewhat of a rebirth of pensions," Lowell said, adding that he's had conversations with several companies that are considering this. "And there are a few reasons behind it."

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5 Tips for Employers Reconsidering Pensions

While a comeback of pensions might not be widespread, some companies are interested in reinstituting pension plans—or implementing them for the first time. For employers who are considering offering pensions, industry experts offer some insight. Read More

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