IBM's decision to freeze its plan may accelerate trend to drop DB; Company says its 401(k) plan will be "one of the richest".(News)(International Business Machines )

Pensions & Investments, January, 2006 by Burr, Barry B.

Byline: Barry B. Burr ARMONK, N.Y. - International Business Machines Inc.'s decision to freeze its U.S. pension plan and enrich its 401(k) plan makes it the biggest retirement sponsor to take such action. Observers say IBM's move likely will accelerate the trend of companies freezing or closing defined benefit plans.

It also may reflect the end of the effort by companies to convert defined benefit plans to cash balance plans, a middle ground between traditional defined benefit and defined contribution retirement plans. IBM announced Jan. 5 it will freeze its $48 billion cash balance plan and enhance its $26 billion 401(k), plan effective Jan. 1, 2008. IBM ranks second in U.S. corporate retirement assets, only behind General Motors Corp. with $114.27...

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