Retirement Royalty: Where Workers Still Get a Pension

As recently as 1998, 60 percent of Fortune 500 companies offered defined-benefit pensions to new hires, according to consulting firm Towers Watson. How many do now, would you say — 3 percent? Eight percent?

Try 22 percent.

Most of these companies fall into one of two camps, with plenty of overlap. Certain companies and industries still want to give experienced, skilled workers an incentive to stick around. Almost three-fifths of utilities, for example, offer some form of defined-benefit pension to new employees. Utilities are also likelier than companies in other sectors to have unions pushing for strong pensions.

Then there are companies that can afford to take a longer view of their own finances. Pensions are riskier on a year-to-year basis for employers than 401(k)s. Falling markets can result in pension shortfalls that look bad on accounting statements. If the shortfalls are big enough, they may require companies to add funds to the plan.

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