Pension Plan Freezes Slowing, Watson Wyatt Finds Most Firms Committed to Keeping Plans

WASHINGTON, July 23, 2007 – The rate of pension plan freezes among FORTUNE
1000 firms has slowed, and the majority of companies with defined benefit
plans are committed to keeping them. These are the findings of two new
studies by Watson Wyatt Worldwide, a leading global consulting firm.

An analysis of pension plan sponsorship among FORTUNE 1000 companies shows
that the share of plan sponsors freezing their plans dropped from 7 percent
in 2006 to 4 percent in 2007. New freezes reached their highest levels in
2006, when 42 additional firms on the FORTUNE 1000 list had frozen plans.

Pension Plan Sponsorship Among FORTUNE 1000 Firms

FORTUNE list year
 Number of defined benefit plan sponsors
 New freezes or terminations*
 Percentage of plan sponsors freezing or terminating plan
 Cumulative number of plan sponsors with a frozen or terminated plan

2007
 638
 25
 4%
 138

2006
 627
 42
 7%
 113

2005
 627
 26
 4%
 71

2004
 633
 6
 1%
 45

* Some due to new companies joining FORTUNE 1000 with a frozen or
terminated plan

“Undoubtedly some companies will freeze their pension plans in the future,
but it appears that trend has peaked,” said Kevin Wagner, a senior
retirement consultant at Watson Wyatt. “With less regulatory uncertainty
and funding volatility better under control, the environment is now a more
positive one for pension plan sponsors.”

Additionally, a Watson Wyatt study of 300 organizations with pension plan
assets of more than $100 million found that 59 percent of companies that
have a defined benefit plan open to new hires have made a formal decision
to keep their plans open. The remainder have not indicated that they’ve
made a formal decision about their plans.

“While many companies are committed to keeping their pensions, they may not
be committed to their current plan design," Wagner said. "Options such as
hybrid pension plans are likely to gain in popularity as companies consider
different features for their plans.”

About Watson Wyatt Worldwide

Watson Wyatt (NYSE: WW) is the trusted business partner to the world’s
leading organizations on people and financial issues. The firm’s global
services include: managing the cost and effectiveness of employee benefit
programs; developing attraction, retention and reward strategies; advising
pension plan sponsors and other institutions on optimal investment
strategies; providing strategic and financial advice to insurance and
financial services companies; and delivering related technology,
outsourcing and data services. Watson Wyatt has 6,000 associates in 31
countries and is located on the Web at http://www.watsonwyatt.com/.

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