Older pensions being retired

[Judi Lynn]

Older pensions being retired
IBM latest company to drop traditional defined-benefit plan

By Barbara Rose
Tribune staff reporter
Published January 7, 2006

When Baxter International Inc.'s shareholders asked tough questions about pension funding last year, they got an unequivocal answer.Baxter's pensions are "sacred," Chief Executive Robert Parkinson said at the annual meeting in May.

But traditional pensions are far from sacrosanct in an age when more companies, including big, profitable employers with well-funded plans, are shifting the risk of saving for retirement onto their workers.

The pension freeze announced this week by IBM Corp. will make it easier for large employers to stop offering retirement plans that promise a steady stream of payments for life, some experts said Friday. And, they said, it could hasten the shift to plans such as 401(k) savings accounts that provide no such guarantees.

"Now that a large, well-funded sponsor did it, it may be that some of these other sponsors won't consider it a third rail that they can't touch," said Temple University professor Jack Vanderhei, who directs a research program for the non-profit Employee Benefit Research Institute.
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http://www.chicagotribune.com/business/chi-0601070110jan07,1,4004267.story?coll=chi-business-hed
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