The list of companies moving from Defined Benefit (DB) plans to Defined Contribution (DC) plans keeps on growing. Some of the latest group to drop the white flag included: IBM who both froze their DB plan and beefed up its 401(k) plan; Verizon Communications Inc. who froze it´s managers pension plan and also beefed up its 401(k) plan; Northwest Airlines who convinced its pilots to accept the DB plan freeze and to move to a DC program; Milliken & Co. who froze their DB plan; Alcoa Corporation put in a new 401(k) plan for new hires March 1, 2006; Russell Corp also froze its DB plan and enhanced its 401(k) plan; Sprint Nextel Corp for pre merger employees (August 12 ) froze their DB plan for vested and will allow unvested to accrue for the balance of the 5 year vesting period only, with the 401(k) plan for all others; and finally Nissan just announced its freezing of the DB plan for all new hires and replaced it with a 401(k) plan.

The companies usual stated reasons is to allow their employees to have increased flexibility in managing their retirement while allowing the company to position themselves for success in the marketplace.

But will the tide ever turn? Is this a cyclical trend that could be reversed? According to Michael Pomery, the President of the UK Institute of Actuaries, such a return would be without the bells and whistles.

Companies will have to strip out such things as the early retirement subsidies built into many of the larger Companies former DB plans.

This writer hopes that it will indeed happen. Employers will have to do a better job of communicating to its members the plan provisions. They would also need to make the benefits more portable - a big reason on the employee side for the move to DC plans in the first place.

By removing some of the bells and whistles, the employer costs would become more acceptable; by providing portability and improved communications, employees would be more appreciative of DB plans.

What do you think? Please email me your thoughts to jchad@hr.com.