Bud Burrell, Chris Clair
HedgeWorld cited by Sanity Check via Wayback, 12 April 2006
U.S. defined benefit pension plans have been upping their allocations to alternative investments, including hedge funds, in recent years, helping boost hedge fund assets to above the $1 trillion mark.
But defined benefit plans, particularly in the corporate world, are facing big problems. They are almost universally underfunded, they face a future with more retirees than ever thanks to longer life expectancies and younger retirement ages, and those retirees are receiving better benefits than in the past. A number of companies, including IBM Corp., Verizon Communications Inc., Motorola Inc., and Lockheed Martin Corp., have announced they are freezing their defined benefit plans, the first step toward eliminating them altogether.