The Case for a Lump Sum Pension Distribution
Large corporations, like Pfizer and Bristol-Myers, have long extolled the benefits of their defined benefit pension plans. However, in 2017, Pfizer finally pulled the plug on its defined benefit plan in favor of a more company-friendly 401(k) employer match. Bristol-Myers announced it would follow suit in 2019. These two corporations are some of the latest examples of a trend that has become more prevalent in the private sector in recent years: the extinction of defined benefit plans.
As an alternative, more and more corporations are electing to "freeze" or discontinue defined benefit plans and replace them with employer-matched 401(k) plans. These plans are much easier and cheaper for corporations to administer.
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