Pension Plan

HR: Leading People, Leading Organizations © 2006 SHRMSHRM Weekly Online Survey: October 24, 2006

Pension Plan

• Sample comprised of 393 randomly selected HR professionals.

• Analyzing 393 responses of 2877 emails sent, 2605 emails were received (response rate = 15%).

• Survey fielded October 24 – October 31, 2006; presentation generated on November 6, 2006.

• Margin of error is +/- 5%.


Does your organization have a pension plan?

30%

23%

31%

16%

0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%

No, my organization doesnot have any pension plan

Yes, my organization hasboth defined benefit and

defined contributionpension plan

Yes, my organization has adefined contribution

pension plan only

Yes, my organization has adefined benefit pension plan

only

n = 392


Does your organization have a pension plan?

Choice Count Percentage Answered

Yes, my organization has a defined benefit pension plan only

64 16%

Yes, my organization has a defined contribution pension plan only

120 31%

Yes, my organization has both defined benefit and defined contribution pension plan

89 23%

No, my organization does not have any pension plan

119 30%


Defined Benefit Pension Plan


Which of the following changes has your organization made, plans to make or does not plan to make to its defined benefit pension plan in the next 12 months?

68%

30%21%

13%4%

4%

4%9%

5%

3%

28%

67% 70%82%

94%

Maintaining definedbenfit pension for all

employees, n=114

Maintaining definedbenfit pension forsome employees,

n=81

Freezing definedbenefit pension, n=86

Converting definedbenefit pension tocash balance or

hybrid plan, n=83

Terminating definedbenfit plan, n=80

Made Plans to make Does not plan to make

Note: Percentage may not total 100% due to rounding



68%

4%

28%

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%


Maintaining our defined benefit pension plan for all employees

n = 114



30%

4%

67%

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%


Maintaining our defined benefit pension plan for some employees

n = 81




21%

9%

70%

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%


Freezing our defined benefit pension plan

n = 86



13%

5%

82%

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%


Converting our defined benefit pension plan to a cash balance orhybrid plan

n = 83



4% 3%

94%

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%


Terminating our defined benefit plan n = 80




Topic Made Plans to make

Does not plan to make

Maintaining our defined benefit pension plan for all employees

68% 4% 28%

Maintaining our defined benefit pension plan for some employees

30% 4% 67%

Freezing our defined benefit pension plan

21% 9% 70%

Converting our defined benefit pension plan to a cash balance or hybrid plan

13% 5% 82%

Terminating our defined benefit plan

4% 3% 94%



Other changes organizations have made or plan to make to their defined benefit pension plan in the next 12 months.

• We are looking into a Profit Sharing plan, in which contributions would be made one time per year.

• Employees hired after 1/1/07 will be automatically enrolled in to the 401K plan at 3% of their salary. Contributions will then be matched 100% up to 6%. Current employees will remain in the defined pension plan; the plan will be frozen 12/31/07. Effective 1/1/08, current employees, when retired, will receive a payout from the defined plan as well as monies accrued from contributions made to the 401K plan. also effective 1/1/08. current employees will have 100% match of all contributions up to 6% and have 3% of salary automatically contributed by the company.

• Union employees will continue in their defined benefit plans until the contracts expire and changes can be negotiated. Non-union employees - defined benefit plan frozen 1/01/06, replace by defined contribution and profit-sharing plan.

• This is a "grandfathered" plan. No changes in works for plan itself but we're proposing to restrict eligibility for retiree health plan participation to those age 60 with min 10 years tenure - while DB plan allows earlier retirement. Also discussed but rejected: Employee contribution to plan.

• Effective 01/01/04, new hires were not eligible for our defined benefit pension plan. New hires are now automatically enrolled in a 401(k) with a company basic contribution.

• We have made 23 out of 24 investment fund and manager changes, added a Roth option with our 304b and 401a plans.


Defined Contribution Pension Plan


Changes organizations have made, plans to make or does not plan to make to their defined contribution pension plan in the next 12 months?

18%

3%

53%

95% 96%

73%

12%7%

29%

2% 3%

10%

9%

9%

1%

18% 79%83%

Maintaining currentplan, n=206

Increasing employeematch, n=173

Increasing the non-elective employer

contribution, n=155

Introducing autoenrollment, n=165

Reducing the non-elective employer

contribution, n=149

Reducing the employee match,

n=165

Made Plan to make Does not plan to make


Which of the following changes has your organization made, plans to make or does not plan to make to its defined contribution pension plan in the next 12 months?

73%

9%

18%

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%


Maintaining our current defined contribution plan

n = 206



12%9%

79%

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%


Increasing the employee match in our defined contribution plan

n = 173



7%10%

83%

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%


Increasing the non-elective employer contribution in our definedcontribution plan

n = 155



29%

18%

53%

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%


Introducing auto enrollment to our defined contribution plan

n = 165



2% 3%

95%

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%


Reducing the non-elective employer contribution in our definedcontribution plan

n = 149



3% 1%

96%

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%


Reducing the employee match in our defined contribution plan

n = 165


Which of the following changes has your organization made, plans to make or does not plan to make to its defined contribution plan in the next 12 months?

Topic Made Plans to make

Does not plan to make

Maintaining our current defined contribution plan

73% 9% 18%

Increasing the employee match in our defined contribution plan

12% 9% 79%

Increasing the non-elective employer contribution in our defined contribution plan

7% 10% 83%

Introducing auto enrollment to our defined contribution pension plan

29% 18% 53%

Reducing the non-elective employer contribution in our defined contribution plan

2% 3% 95%

Reducing the employee match in our defined contribution plan

3% 1% 96%


Other changes organizations have made or plan to make their defined contribution pension plan in the next 12 months.

• We have amended our plan to allow increases or decreases in deferral percentage at any time. We have also amended our plan to allow participants to defer up to 100% of their salary.

• Plans to make available Roth 401K• My organization plans to make changes to our TDA within the next year.• Adding additional fund choices to balance out investment options and added a

"Step Up" plan which automatically increases employee contributions over a period of time (if employee chooses to participate)

• Add Lifestyle funds• We have employer contribution DC plan (7%) plus 401k with employer match

at 50% up to 6% employee contribution. Successfully implemented auto-enrollment of new employees last year. Decided not to auto-enroll others.

• We are making changes but I won't know until December 2006.• As part of the PPA, we are considering deferring some of the participant fees

onto the employees.• Increasing the match• Plan to review auto enrollment option for possible implementation.• maintain 403b as is with a flat dollar contribution based on years of service• Due to our ESOP, the employee contribution has been maxed to the Defined

Contribution plan at 3%/year. As of 11/1/06, it was increased to a 6% maximum contribution.

• We will be adding a Roth option to our 403(b) plan.• Our eligibility period will change from one year to two years of employment.• Reducing eligibility from 12 months service to 60 days service

Documents

Pension Plan