Looking for companies still offering pensions?

Looking for companies still offering pensions?

Looking for companies still offering pensions?

The retirement benefit plans in the United States are undergoing a tumultuous change, with many of the erstwhile global giants feeling the burden of the existing defined benefit pension plans too heavy and resorting instead to adopt the 401 (k) or hybrid plan.  From coast to coast, the conglomerates have been busy changing their plans to escape the mounting retirement benefit payments and out of the largest companies in the US, only seventeen percent have persisted with the defined benefit pension plans.  Most of them however, are restricting this facility only to existing employees up to a particular cutoff date and are offering the new hires only the revised 401 (k) plan.

Though the transformation to the new plan has been almost universal, there are still a few fortune 500 companies in the US, who are still operating on the defined benefit pension plan.  Research on the subject throws light on the fact that they has been a steady decrease of about 67% from 1998 of the companies using the defined benefit plan and nearly 58% have already adopted the 401 (k) plan.  Let us have a look at some of the companies still offering the defined benefit plan to their employees:

Exxon Mobil pension

Exxon Mobil still follows a pension plan based on the defined benefit system, which means that the plan includes a formula that will calculate the retirement benefit for you. The formula for calculating the benefits depends on your years of pension service, your pensionable pay and your expected benefit in social security. At the time of retirement, you can tell the company how you want to draw your benefits and when you would like the payments to start. Please see the pension formula below:

1.6 percent x pension service years x Average last pensionable pay (less social security deductions)

Your eligibility for basic pension starts normally when you are 65 years of age. If you want to start drawing your benefits earlier, your basic pension will suffer a pro-rata adjustment.

Lockheed and other defense contractors still have pensions

Lockheed and other defense contractors still have pensions

Lockheed Martin (LMT) pension

Lockheed Martin is another US company that continues its defined benefit plan for its existing employees up to a cutoff date and it is applicable only for the participating employees. They expect nearly 64 percentages of the employees to retire in the next five years and continue to guard their retirement benefits under the defined benefit plan. However, new hires will not have the good fortune of this facility any longer.

United Parcel Service (UPS) pension

UPS has wide-ranging retirement plans, which include the defined benefit plan and the defined contribution plan. They cover several of their international employees under the defined benefit plan, especially in Canada and the United States. Additionally, the government-sponsored retirement and pension plans also cover these employees, though the company takes no responsibility in the actual disbursement of benefits under these plans. The UPS covers all employees of domestic subsidiaries, who are not part of the collective bargaining agreement, in their non-contributory plan

Johnson and Johnson pension

Johnson & Johnson offer several post-retirement plans including the defined benefit plan and the defined contributory plan (voluntary contribution under 401 (k) plans) and indemnity termination plans worldwide. The company follows these plans according to the country in which they operate, though records show that they largely follow the defined benefit plan, which requires company contribution into special funds. The accruing defined benefit retirement benefits will depend on the pensionable salary and the period of service of the individual employee

3M (MMM) defined benefits pension

The erstwhile Minnesota Mining and Manufacturing Company, now called the 3M Company, based in St. Paul, Minnesota is an American conglomerate with over 55,000 products, $30 billion in sales and employee strength of over 88,000. They have a variety of company-sponsored retirement schemes covering the US and the other international employees. Their employee retirement plans include the defined benefit pension plan, post-retirement health care and life insurance plans as per the SFAS or the Statement of Financial Accounting Standards, No.87 that makes it imperative for employers to file their excess or short contributions to the defined benefit plan, which they would consider as an asset or liability in the financial reckoning. Though the company’s own defined benefit pension values declined in 2010, it considerably increased in the year 2012.

Bank of America (BAC) pension package

Bank of America,  with their strong expertise in actuarial and investment portfolios have managed their defined benefit plan properly, balancing them with costs and liabilities and investing the funds prudently to extract the greatest benefit to keep their defined benefit plan healthy and growing

Bank of America Merrill Lynch also offers their services for handling your defined benefit plans judiciously and discreetly.

Big banks and brokerages are companies that still offer pensions

Big banks and brokerages are companies that still offer pensions

Wachovia pension

Wachovia Bank strictly follows a defined benefit plan that they established on 1 February 1974. During the gradual transformation of the bank to its present situation, they called the defined benefit plan by several erstwhile names like The Pension and Life Assurance Plan of First Fidelity Bank and the Pension and Life Assurance Plan of First Union National Bank.

In December 2004, the bank closed the defined benefit plan to new members and on 1 April 2006, they merged their plan with the CoreStates Bank N.A. Pension Scheme.

Coca Cola pension plan

Coca Cola adheres to a defined benefit pension plan (tax-qualified) that they call the “Pension Plan.” All of the US employees of the company, except those who have adopted the collective bargaining agreements will benefit from this plan. The retiring employee gets a life annuity at his normal retirement age and this calculation works out on the following formula:

1.15 percent of the member’s average last earning x years of benefit service

Accenture pension

Accenture, a world leader in management consultancy uses the defined benefit retirement plan for some of its present, retired and resigned employees in the United States and Several of the other countries where they operate.

The company, using the actuarial methods prescribed by the SFAS 87, calculates the employee’s retirement benefits depending on the compensation earned in the years just before retirement and the number of years of service.

The company is also generous enough to offer several other post-retirement benefits like severance benefits and disability benefits. It also helps the retired employees to continue availing the health care benefits, besides providing life insurance coverage to those employees who remain inactive after retirement.

Liden Nestle Soled & Associated Inc. pension

In Nestle, they follow the defined benefit plan for retirement. What’s better than a real pension and all the chocolate you can eat? They use a formula to calculate the benefit of a retired employee under the defined benefit plan that will normally include the pay, years of service, age when retiring and some other factors. For example, under this plan, if the employer contributes $200 per month and the employee works for 30 years in the company, he would receive $6,000 per month up to the end of his life.

Conclusion

Many government companies still follow the defined benefit plan though some are now opting for the defined contribution pension plan.  It is difficult to calculate the cost of a defined benefit plan, because most of the calculations will depend on assumptions, which in turn will include the lifespan of the participant, his retirement age, the interest expected from the retirement fund’s investment and the insurance cost payable to the Pension Benefit Guarantee Corporation.  So if you are thinking about your old age and want a nice real pension to get paid out to you each month, look to these companies and try and get a job.  Remember, the earlier you get started, the better the benefits at the end of you working years!

8 Responses to Companies in the US that Still Offer Defined Benefit Pension Plans

  1. Pretty interesting stuff. Pension plans are pretty nice to have, but a part of me would almost prefer to not have one, just so my “retirement saving and planning muscle” doesn’t get out of shape in case things disappear…

  2. This is a great resource. With social security being a question mark, planning for retirement is more important than ever. A defined benefit plan, even if it isn’t huge, is still a major asset.

  3. It’s reassuring to see that at least some employers still offer a pension plan, if that is an important consideration when seeking employment. Still, decades working at the same place is difficult to contemplate! But security in retirement is certainly nice.

  4. Poor Student says:

    These all sound like great companies to work for. It’s a shame that so many companies have done away with pension plans.

  5. I didn’t know all of these companies still offered a pension. As great as it would be to have pension, I think I would still be saving for retirement on my own as well. I wouldn’t want to work for 20 years and find out the company is doing away with the pension and my benefits will be limited.

  6. Kimberly says:

    Mayo Clinic does have Pension Plan for employees. Mayo Clinic employees in Arizona, Minnesota, and Florida. I love my job with Mayo Clinic!

  7. Melissa says:

    How would I cite this article? The author is pradmin?

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