Healthy companies are also freezing pension plans. How does that work?
Healthy companies can’t terminate pension plans without incurring penalties, but they can freeze them. Freezing a pension plan means that a company stops offering the plan to new hires, and current employees stop accruing benefits. A mid-career employee will be entitled to whatever benefits that have been accrued up to the pension freeze. IBM, Hewlett Packard and Motorola are some of the blue chip companies that have frozen pensions. Most have replaced frozen pensions with 401(k)s.
Related Questions
- Several companies, like US Airways and Bethlehem Steel have gone bankrupt and have had their pension plans taken over by the PBGC (Pension Benefit Guarantee Corporation). Could this happen to IBM as a result of the lawsuit?
- Whats the difference between companies in the Terminating Pension Plans database and companies that appear in the 5310 database?
- Healthy companies are also freezing pension plans. How does that work?
