HIGHLIGHTS

The rapid growth in 401(k) type plans occurring over the past decade continued in 1993, with a 10% increase from 140,000 plans in 1992 to 154,500 plans in 1993. Active participants in 401(k) plans increased 3% from 22.4 million in 1992 to 23.1 million in 1993.

In contrast to the continued strong growth in 401(k) plans, the number of defined benefit plans decreased 6% in 1993 to 84,000 and the number of non-401(k) defined contribution plans decreased 3% to 464,000. The number of active participants decreased by one percent in defined benefit plans and remained at about the same level in non-401(k) defined contribution plans.

These decreases or lack of growth in non-401(k) plans and active participants are continuations of prior trends. Since 1983, the number of defined benefit plans has declined at an average annual rate of 7.1%. Most plan terminations have been by small employers. This factor, along with the downsizing occurring among many firms with ongoing defined benefit plans, has led to a gradual but steady decline of active participants, averaging 1.8% annually over the 1983-1993 period.

Non-401(k) defined contribution plans and participants have generally been declining each year since 1987, with the number of plans decreasing at an average annual rate of 1.1% and the number of active participants decreasing at an average annual rate of 4.6%. Much of the decrease in non-401(k) defined contribution plans and participants over this period appears due to the conversion of many savings and other types of defined contribution plans to 401(k) status.

Other findings from the Form 5500 reports filed for 1993 plan years are summarized below:

• The overall number of private pension plans filing Form 5500 reports in 1993 was 702,000, down slightly from the 708,000 reports filed in 1992.
  

• Total active participants increased from 64.2 million in 1992 to 64.7 million in 1993. The total number of active participants includes double counting of workers participating in more than one plan. A rough estimate of the net number of workers in plans in 1993 is 44.8 million, with 25.1 million participating in a primary defined benefit plan and 19.8 million participating in a primary defined contribution plan. An estimated 16.6 million workers in a primary defined benefit or defined contribution plan also participated in a supplemental defined contribution plan.
  

• Plan assets increased among all types of pension plans in 1993. From 1992 to 1993 total plan assets increased 11% to $2,316 billion, with defined benefit plan assets increasing 9% to $1,248 billion, non-401(k) defined contribution plan assets increasing 15% to $452 billion and 401(k) plan assets increasing 12% to $616 billion.
  

• Total plan contributions increased 19% from $128.8 billion in 1992 to $153.6 billion in 1993.
  

• Contributions to defined benefit plans, after a continuous decline from 1984 to 1990, increased for the third straight year. Contributions amounted to $52.1 billion in 1993, a 48% increase over 1992. Over one-third of total contributions were made to just two plans -- the GM Hourly Plan, which received $15.3 billion in contributions and the Chrysler Hourly Plan, which received $2.3 billion in contributions.
  

• Defined contribution plans reported $101.5 billion in contributions received during 1993, an 8% increase over 1992. Employer cash contributions increased 6% to $50.8 billion and employee contributions increased 13% to $46.1 billion. Almost 90% of employee contributions were paid into 401(k) type plans.
  

• Benefit payments from plans increased by about 3% in 1993 to $156.3 billion. Benefits paid out by defined benefit plans increased 2% to $79.1 billion and benefit payments from defined contribution plans increased 4% to $77.2 billion.
  

• The large increase in contributions received by plans in 1993 combined with the very modest increase in benefit payouts improved the net cash flow of all plans from -$23.6 billion in 1992 to -$2.7 billion in 1993.
  

• The net cash flow of contributions minus benefit payouts to defined benefit plans improved from -$42.7 billion in 1992 to - $27.0 billion in 1993, while the net cash flow to defined contribution plans increased from $19.0 billion in 1992 to $24.3 billion in 1993.
  

• In 1993, 79% of defined benefit plans reported asset amounts which exceeded current liabilities. The median funding ratio of all defined benefit plans was 1.24.
  

• The best funded plan groups were single employer non-collectively bargained plans, with 82% fully funded, followed by multiemployer plans, with 73% fully funded, and single employer collectively bargained plans, with 59% fully funded.
  

• From 1990 to 1993, the percent of plans fully funded stayed within a fairly narrow range of 79% to 82%. The median funding ratio ranged from 1.32 in 1990 to 1.24 in 1993.