U.S. Steel has deepened the freeze of its pension plan that began in 2003. The steel giant, which stopped making its DB plan available to new hires 12 years ago, recently froze accruals for all active plan participants, according to Pensions & Investments.
Effective Dec. 31, 2015, non-union participants in the U.S. Steel DB plan will be made participants in a defined contribution plan instead.
This change is all the more dramatic since at the dawn of the 20th century U.S. Steel became one of the first employers to offer a pension plan. Not only that, says Pensions & Investments, the way the company invested pension plan assets and used earnings on those investments to pay retirement benefits set an industry standard for such plans.
U.S. Steel is not unique among high-profile employers in taking this action. In 16 years, the number of Fortune 500 companies that offer DB plans fell by around 60% to 111 by 2014; conversely, during that period, the number of Fortune 500 offering only DC plans doubled to nearly 200, says Towers Watson & Co.
Effective Dec. 31, 2015, non-union participants in the U.S. Steel DB plan will be made participants in a defined contribution plan instead.
This change is all the more dramatic since at the dawn of the 20th century U.S. Steel became one of the first employers to offer a pension plan. Not only that, says Pensions & Investments, the way the company invested pension plan assets and used earnings on those investments to pay retirement benefits set an industry standard for such plans.
U.S. Steel is not unique among high-profile employers in taking this action. In 16 years, the number of Fortune 500 companies that offer DB plans fell by around 60% to 111 by 2014; conversely, during that period, the number of Fortune 500 offering only DC plans doubled to nearly 200, says Towers Watson & Co.
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