Big names join defined benefit exodus; Changes, phaseouts attempt to reduce volatility in costs.(Alcoa Inc., General Motors Corp., IBM Corp., NCR Corp., Unisys Corp. and WellPoint Inc. )

Business Insurance, December, 2006 by Geisel, Jerry

Byline: Jerry Geisel The phasing out of defined benefit pension plans is not a new story. Indeed, over the past 25 years, employers have been moving away from the plans-with their contribution and cost volatility-in favor of defined contribution plans, especially 401(k) plans, whose contributions and costs are more predictable.

But what made 2006 so extraordinary in terms of defined benefit plans was the sheer number of big-name companies that announced they were phasing out some or all of their defined benefit plans. Those corporations included Alcoa Inc., General Motors Corp., IBM Corp., NCR Corp., Unisys Corp. and WellPoint Inc. Corporations freezing their pension plans did so in several different ways. For example, aluminum giant Alcoa is retaining...

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