With 77 million baby boomers headed for retirement, nearly every facet of corporate pension plans will be subject to analysis and change.
That’s the result of discussions from the recent “Pensions and Retirement Conference” held by The Conference Board.
The decline in defined benefit plans and the rise in defined contribution plans – combined with increasing longevity – is creating growing risk among employees regarding their retirement benefits, many senior human resource executives agree.
As retirement benefits are redesigned for today’s retirees, it’s unclear whether employer programs can support long-term financial security.
“The changing definition of retirement raises controversial questions, especially from a societal point of view,” says a report from the conference, “which focuses on some of the difficult questions being asked today and offers controversial as well as conventional viewpoints. What is the responsibility of the corporation to provide a safe and secure retirement for its employees?”
Legislation, including the Pension Protection Act of 2006, liberalized requirements for defined contribution plans. Many experts disagree over whether the new rules for defined benefit plans will help stabilize the system or encourage more companies to curtail their plans.
Executives attending the conference pointed out that as more companies discontinue their defined benefit plans, they’ll need to change their overall retirement programs so they work more effectively for employees.