Barnes & Noble continues efforts to close defined-benefit pension plan
In 1985, only one in 10 Fortune 100 companies offered 401(k)-style plans to new employees. Today, that number has increased to seven in 10.
Barnes & Noble Inc. is one of many companies choosing to abandon expensive, unpredictable defined-benefit retirement plans in favor of 401(k)-style plans; giving workers more control and ownership over their retirements.
Barnes & Noble will continue its efforts to close out the company’s antiquated defined-benefit pension plan by offering lump-sum payments to 2,350 remaining participants, according to Pensions & Investments.
Prior to 2000, most Barnes & Noble employees were covered under the company’s defined-benefit pension plan. But the bookseller modernized its retirement plan in January 2000 by freezing the traditional defined-benefit plan and offering workers 401(k) retirement plans going forward.
More than 25,700 Barnes & Noble employees now choose from 19 different investment options for their retirement-savings accounts. The company’s plan is similar to those offered by Cabela’s, Foot Locker and Toys R Us.
In 1985, only one in 10 Fortune 100 companies offered 401(k)-style plans to new employees. Today, that number has increased to seven in 10.
Barnes & Noble’s transition to 401(k)s is a continuation of the private-sector modernization of retirement plans. Expect other companies to follow suit.