For many American workers, a defined benefit pension plan is an artifact that has gone the way of phone booths, cassette tapes and percolator coffee.
But millions of federal and state government workers, teachers, and individuals who work for companies that continue to provide this once-common benefit are still eligible for a pension when they retire. There are even signs that pensions are making a minor comeback. In January, IBM discontinued contributions to its employees’ 401(k) plans and defrosted a defined benefit plan it froze more than 15 years ago. IBM’s move was influenced by favorable market conditions that could compel other companies to thaw out frozen pensions.
