The survey included 100 corporate plan sponsors with $711 billion in pension assets and $441 billion in defined contribution plan assets. The plans in the survey cover 10.2 million participants in DB plans and 5.9 million in DC plans.

Survey Findings
Year-end assets for both traditional pension plans and defined contribution plans fell 12 percent and five percent respectively from beginning year levels. Poor market returns contributed significantly to the decline.

"The turmoil in the financial markets has certainly had an impact on retirement plans," said Robert Angelica, CIEBA chairman, and chairman and chief executive officer of AT&T Investment Management Corporation. "However, workers and retirees are cushioned from the full impact of difficult market conditions because most CIEBA members continue to provide traditional guaranteed benefits. Plan sponsors and employees alike need to remember that retirement plan investments are long-term and that we all need to have patience."

Nearly all (99 percent) of CIEBA's members offer both DB and DC plans, and DB plans continue to represent the primary plan type. DB plans had 61 percent more assets, covered 74 percent more participants, and paid out 57 percent more in benefits compared to DC plans.

Under a DB plan, the plan sponsor commits to provide a specified level of benefits to plan participants. In the private sector generally, plan sponsors pay for these benefits, directly manage investment of plan assets and bear any investment risk. (Basic benefits in private sector DB plans are federally insured.)

Under most DC plans -- particularly 401(k) plans -- employees provide much or all of the funding, although the employer may and commonly does provide a match for some employee contributions. Employees bear the investment risk in DC plans, and in many 401(k) plans, participants direct the investment of their accounts.

 Other findings of the survey include:

• Both DB and DC plan benefit payments represented seven percent of year-end assets. DC plan benefit payments exceeded contributions for the seventh consecutive year.
• Both DB and DC plan assets were substantially invested in equities. DB plans had 61 percent allocated to equities; DC plans had 64 percent in equity investments of all types.
• Most DB plan assets were actively managed (82 percent) while 44 percent of DC plan assets had active management. The percentage of assets managed internally was similar, for DB and DC plans, 17 percent and 15 percent respectively.
• All of the CIEBA members included in the survey offered daily valuation of their DC plans.
• DC plan contributions averaged more than $6,000 per active employee, with 30 percent provided in employer match.
• Participation in DC plans by eligible employees remained stable at 85 percent in 2000 and 2001.
• The percentage of plan sponsors using Web sites to communicate with plan participants increased significantly -- from 66 percent in 1999 to 96 percent in 2001.
• More than 80 percent of plan sponsors offered some type of investment education. A much smaller group (31 percent) made individual financial planning available. Plan sponsors used interactive software advisory programs more often -- 28 percent offering such programs in 2001 compared to 21 percent in 2000.

The Committee on Investment of Employee Benefit Assets, better known as CIEBA, is the voice of the Association for Financial Professionals (AFP) on employee benefit plan asset management and investment issues. CIEBA represents more than 120 country's largest pension funds today. CIEBA members manage more than $1.1 trillion of behalf of 16 million participants and beneficiaries.

The Association for Financial Professionals in Bethesda, Maryland supports more than 14,000 individual members from a wide range of industries through all stages of their careers in various aspects of treasury and financial management. AFP is the preferred resource for financial professionals for continuing education, financial tools and publications, career development, certification, research, representation to legislators and regulators, and the development of industry standards.

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