IBM Halts Pensions in Favor of 401(k)s

The Washington Post reports:

International Business Machines Corp. said today it will freeze the pension plans of some 120,000 employees in the United States, effective at the end of next year, and will offer instead a more generous 401(k) plan.

IBM's move is part of a corporate stampede away from traditional pension plans. IBM officials called the change essential to remain competitive with foreign and domestic information technology rivals.


The freeze means that benefits earned by current workers up to Jan. 1, 2008 will be preserved, but after that date they will not increase. The company already had eliminated traditional pensions for new hires starting last year.

Eventually,only government workers will get a pension.