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U.S. Master™ Pension Guide, 2009 Edition
Revised for 2009 to include relevant provisions of the Heroes Earnings Assistance Relief Tax (HEART) Act and the Emergency Economic Stabilization Act.

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CCH® PENSION AND BENEFITS — 5/4/07

EBSA report shows increase in retirement plan assets to $4.7 trillion in 2004

The Employee Benefits Security Administration (EBSA) has released a report, entitled “Private Pension Plan Bulletin: Abstract of 2004 Form 5500 Annual Reports,” which reveals that pension plan assets rose in 2004, to $4.7 trillion. In addition, EBSA states in the report that, “Over the past three decades, as the private pension system has shifted from defined benefit plans toward 401(k)-type defined contribution plans, the financing of benefits has shifted from employers to participants.”

Other findings from Form 5500 series annual reports for the 2004 plan year include the following:

• The total number of pension plans fell for the fourth consecutive year by 2.4%, to 683,000 plans. Defined benefit plans increased by 1%, while defined contribution plans fell by 2.7%. The decline in defined contribution plans was led by a 30% decrease in the number of money purchase plans, which follows a 34% decrease in 2003.
• Between 2003 and 2004, the total active participant count decreased slightly for the second consecutive year, from 73.1 million to 72.7 million. The number of active participants in defined benefit plans decreased for the fifth consecutive year, by 3.3% in 2004. The number of active participants in defined contribution plans increased slightly, to 52.2 million.
• 401(k)-type plans continued to grow in 2004, with the number of plans increasing from 404,000 to 419,000. The number of active participants grew slightly, from 43.6 million to 44.4 million.
• The number of cash balance plans increased by 30% in 2004, with small plans accounting for nearly all of the increase.
• Defined contribution plan contributions grew by 7.9%, to $228.6 billion. Defined benefit plan contributions decreased by 20.2%, to $94.4 billion, in contrast to double-digit growth in defined benefit contributions for the previous three years. Overall, contributions to pension plans declined by 2.2% in 2004 to $323 billion.
• In 2004, pension plans disbursed $333.3 billion for the payment of benefits, with $140.4 billion being disbursed from defined benefit plans and $192.9 billion from defined contribution plans. These payments were made either directly to retirees, beneficiaries, and terminating employees or to insurance carriers for payment of benefits. The amounts reflect increases over 2003 of 4.1% in defined benefit plans and 15.9% in defined contribution plans.
• Overall, pension plans disbursed $10.3 billion in 2004 or 3.2% more than they received in contributions. Defined benefit plans disbursed $46.0 billion more than they collected in contributions, while defined contribution plans disbursed $35.7 billion less than they received in contributions.

For more information on this and related topics, consult the CCH Pension Plan Guide.

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