As of 2017, only 16 percent of Fortune 500 companies offered a traditionally defined benefit pension plan to its new hires, according to a Willis Towers Watson report. That’s a dramatic drop from the 59 percent of that same group of employers that offered pensions in 1998.
Pension plans are retirement plans that employers maintain and contribute money for employees who will later receive fixed payouts when they retire. Although more and more companies are opting to offer employees a 401k plan instead — which is much more cost-effective for the employer — there are still some jobs that come with a pension.
ExxonMobil’s pension plan provides employees with a monthly benefit from retirement until death. The plan offered by the energy company is flexible — employees can choose from different payment options. The pension can also benefit survivors in the case of the employee’s death. ExxonMobil employees can begin collecting pension payments as early as age 50.
In addition to giving employees access to a 401k plan with a 3 percent company match, Coca-Cola also offers a defined benefit plan that is fully funded by the company.
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BB&T Bank makes it easy for its employees to participate in its pension plan — employees are automatically enrolled on the first day of the year after they complete one qualifying year of service, which is defined by the company as “a year during which the employee works at least 1,000 hours.” The plan is fully funded by BB&T, and employees are 100 percent vested after five years of vesting service. Employees can access their pension benefit as early as age 55.
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NextEra Energy employees who have been with the company for a full year are eligible for the pension plan. The plan is fully funded by the company and provides basic credits toward a cash balance account based on years of vesting service. Employees who have less than five years of vesting services get credit for 4.5 percent of their pensionable earnings, and those with five years or more get credit for 6 percent of their pensionable earnings.
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NuStar Energy provides its eligible U.S. employees with a cash balance formula-based pension plan. The plan determines pension benefits based on age, service and interest credits, and employees become fully vested in their benefits after three years of vesting service.
Pacific Gas & Electric
PG&E is one of the few Fortune 500 companies that still offers a 401k and a pension plan. The natural gas and electric service provider offers both final pay formula and cash balance formula pension plans. You can also designate a preretirement beneficiary to make sure your vested benefit pension goes to a spouse or another primary beneficiary in the event you die before retiring.
Southern Company offers its employees a defined benefit pension plan that provides them with a monthly retirement annuity. Additionally, employees can contribute retirement savings to their choice of a before-tax account, an after-tax account, a Roth 401k account or a combination of the three.
3M offers a fully funded pension plan with no minimum required contribution. The benefit amount depends on the retiree’s age, pension service and pension earnings.
General Mills provides a pension plan for salaried new hires who were hired before June 2013, and non-salaried production employees who were hired before the start of 2018, Pensions & Investments reported. The company plans to freeze all U.S. defined benefit plans at the end of 2027. General Mills still offers 401k plans to its employees.
United Parcel Service
In 2017, UPS announced that it would be freezing pension benefit contributions for 70,000 of its nonunion workers by January 2023. These workers will still be eligible for 401k matching plans. This change did not affect the approximately 270,000 drivers and other employees covered by the International Brotherhood of Teamsters union, the Washington Post reported.
Prior to the freeze, eligible UPS employees could collect pension benefits after five to 10 years of vesting service.
Accenture terminated its previous pension plan in 2017, but the company still offers a fully funded, defined benefit plan to approximately 550 U.S. employees who remain eligible to accrue benefits.
Johnson & Johnson
Johnson & Johnson wants to help keep its employees’ finances healthy by offering its employees a noncontributory pension plan, which vests after five years or upon reaching the age of 55. However, the company reduced its pension benefits for employees who were hired after 2014, The Wall Street Journal reported.
Aflac, a leading provider of voluntary insurance, offers a pension plan to qualified employees who were hired before Sept. 30, 2013, and complete five years of service. Qualified employees receive a monthly pension payment equal to 1 percent of their average monthly compensation multiplied by their years of service up to 25 years, plus 0.5 percent of their average monthly compensation multiplied by their years of service in excess of 25 years.
Lockheed Martin employees who were hired before 2006 were grandfathered into its defined benefit pension plan, which the company will freeze by 2020. The global security and aerospace company continues to offer 401k savings plans to its employees.
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About the Author
Gabrielle joined GOBankingRates in 2017 and brings with her a decade of experience in the journalism industry. Before joining the team, she was a staff writer-reporter for People Magazine and People.com. Her work has also appeared on E! Online, Us Weekly, Patch, Sweety High and Discover Los Angeles, and she has been featured on “Good Morning America” as a celebrity news expert.