Tenneco Inc. has decided to freeze its defined benefit plan for most U.S. salaried and non-union hourly employees, effective January 1, 2007, in exchange for higher contributions to its defined contribution plans. [8-K]
August 23, 2006
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Blogging Employee Benefits 
Is there ever a situation when a switch from a defined benefit, to a defined contribution plan is good for the wage earner? Do you think that DBP’s generally have over promised benefits, to people to young (age 55) to retire?
How much of the stock market run up since 1982 is due to the proliferation of DCP’s? When large scale withdrawals from DCP’s begin in the next few years, will the stock market tank? Thank you.
Comment by Tom — August 23, 2006 @ 9:32 pm
“Good” depends on your perspective, but the benefits of a DC plan accrue more quickly up front, so if I’m a young worker who doesn’t expect to stay for more than 5-10 years, I think I prefer a DC plan.
Comment by Bentakis — August 24, 2006 @ 12:36 pm