Just under half of companies with defined-benefit pension planshave plans that are active and open to new hires, according to asurvey from investment manager SEI. Its poll of around 150companies of various sizes shows 47% report having active plans,while 24% say their plans are closed to new entrants and 28% haveplans that are frozen—closed to new entrants with participants notaccruing benefits.

These numbers closely mirror SEI's previous survey in January,which showed 46% of plans were active, 29% closed and 24% frozen.In both surveys, only 1%of companies were in the process ofterminating their plans.

The availability of defined-benefit pensions has declined inrecent years. In the early 2000s, about 60% of DB plans were stillactive. Jon Waite, director of institutional advice at SEI, saysthe erosion of defined- benefit pension plans may not be over, butplan sponsors may be rethinking their approach to the situation. Inthe past few years, pension sponsors have been spending more timeon overall pension strategy, rather than making changes to theirplans, he says.

“Plan sponsors have reached a point where they understand thatclosing or freezing the plan is not the panacea,” Waite says. “Itis not going to solve their underfunding situation.”

General Motors took a more drastic approach to managing therisks involved in defined-benefit pensions when it announcedrecently that it will offer lump-sum buyouts to salaried retireesand transfer the management of its active pension plans forsalaried retirees to Prudential Financial.

The company's aim is to reduce the size of its overall pensionassets and liabilities, Waite says. Because GM has a huge pensionplan, “they may view it as they're getting penalized for having thepotential for so much volatility to their balance sheets comingfrom these pension plans,” he says, noting that if GM shrinks itspension plan, it should have less year-to-year volatility and amore stable balance sheet.

GM's pension is larger than most companies' plans, and thechanges it is making are not a route the typical U.S. pension plansponsor will want to take, Waite says. He notes that with U.S.interest rates so low, it's expensive to offer lump sums and buyinsurance contracts.

But many plan sponsors are still looking at how to manage theirplans, evaluating their risk and de-risking plans whenpossible.

With interest rates low, companies increasingly are turningtoward liability-driven investing (LDI), Waite says. “They'relooking at much more customized and complex interest-rate-hedgingstrategies within the pension, and what they're also looking at iswhat the proper level of risk is today and going forward.”