The rapid growth in 401(k) type plans occurring over the past
decade continued in 1993, with a 10% increase from 140,000 plans in 1992 to
154,500 plans in 1993. Active participants in 401(k) plans increased 3% from
22.4 million in 1992 to 23.1 million in 1993.
In contrast to the continued strong growth in 401(k) plans, the
number of defined benefit plans decreased 6% in 1993 to 84,000 and the number
of non-401(k) defined contribution plans decreased 3% to 464,000. The number of
active participants decreased by one percent in defined benefit plans and
remained at about the same level in non-401(k) defined contribution plans.
These decreases or lack of growth in non-401(k) plans and active
participants are continuations of prior trends. Since 1983, the number of
defined benefit plans has declined at an average annual rate of 7.1%. Most plan
terminations have been by small employers. This factor, along with the
downsizing occurring among many firms with ongoing defined benefit plans, has
led to a gradual but steady decline of active participants, averaging 1.8%
annually over the 1983-1993 period.
Non-401(k) defined contribution plans and participants have
generally been declining each year since 1987, with the number of plans
decreasing at an average annual rate of 1.1% and the number of active
participants decreasing at an average annual rate of 4.6%. Much of the decrease
in non-401(k) defined contribution plans and participants over this period
appears due to the conversion of many savings and other types of defined
contribution plans to 401(k) status.
Other findings from the Form 5500 reports filed for 1993 plan
years are summarized below:
- The overall number of private pension plans filing Form 5500
reports in 1993 was 702,000, down slightly from the 708,000 reports filed in
- Total active participants increased from 64.2 million in 1992
to 64.7 million in 1993. The total number of active participants includes
double counting of workers participating in more than one plan. A rough
estimate of the net number of workers in plans in 1993 is 44.8 million, with
25.1 million participating in a primary defined benefit plan and 19.8 million
participating in a primary defined contribution plan. An estimated 16.6 million
workers in a primary defined benefit or defined contribution plan also
participated in a supplemental defined contribution plan.
- Plan assets increased among all types of pension plans in
1993. From 1992 to 1993 total plan assets increased 11% to $2,316 billion, with
defined benefit plan assets increasing 9% to $1,248 billion, non-401(k) defined
contribution plan assets increasing 15% to $452 billion and 401(k) plan assets
increasing 12% to $616 billion.
- Total plan contributions increased 19% from $128.8 billion in
1992 to $153.6 billion in 1993.
- Contributions to defined benefit plans, after a continuous
decline from 1984 to 1990, increased for the third straight year. Contributions
amounted to $52.1 billion in 1993, a 48% increase over 1992. Over one-third of
total contributions were made to just two plans -- the GM Hourly Plan, which
received $15.3 billion in contributions and the Chrysler Hourly Plan, which
received $2.3 billion in contributions.
- Defined contribution plans reported $101.5 billion in
contributions received during 1993, an 8% increase over 1992. Employer cash
contributions increased 6% to $50.8 billion and employee contributions
increased 13% to $46.1 billion. Almost 90% of employee contributions were paid
into 401(k) type plans.
- Benefit payments from plans increased by about 3% in 1993 to
$156.3 billion. Benefits paid out by defined benefit plans increased 2% to
$79.1 billion and benefit payments from defined contribution plans increased 4%
to $77.2 billion.
- The large increase in contributions received by plans in 1993
combined with the very modest increase in benefit payouts improved the net cash
flow of all plans from -$23.6 billion in 1992 to -$2.7 billion in 1993.
- The net cash flow of contributions minus benefit payouts to
defined benefit plans improved from -$42.7 billion in 1992 to - $27.0 billion
in 1993, while the net cash flow to defined contribution plans increased from
$19.0 billion in 1992 to $24.3 billion in 1993.
- In 1993, 79% of defined benefit plans reported asset amounts
which exceeded current liabilities. The median funding ratio of all defined
benefit plans was 1.24.
- The best funded plan groups were single employer
non-collectively bargained plans, with 82% fully funded, followed by
multiemployer plans, with 73% fully funded, and single employer collectively
bargained plans, with 59% fully funded.
- From 1990 to 1993, the percent of plans fully funded stayed
within a fairly narrow range of 79% to 82%. The median funding ratio ranged
from 1.32 in 1990 to 1.24 in 1993.