Walking the line—Factors for evaluating potential freezes of defined benefit plans

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By William Most | 01 November 2006

Freezing a defined benefit (DB) pension plan has become a popular cost-control strategy, and many firms also opt to introduce a replacement defined contribution (DC) plan. But the decision to freeze a plan should not be taken likely, and companies considering a switch to a DC plan should first have a thorough understanding of their plan freeze options, the replacement DC plans and other benefit options available, and the impact that a freeze or switch can have on benefits, investments, and accounting.