U.S. Markets closed

10 Biggest Companies That Offer Pensions

Neha Gupta

What are the biggest companies that offer pensions? A typical person will spend more than three-quarters of their life working. On the other hand, some choose to start their businesses. According to a report by the Global Entrepreneurship Monitor, the United States has close to 27 million entrepreneurs. The 2010 US Census data shows that the population of the working-age Americans was about 244 million at the time of the census. As such, only close to 14% of working-age Americans are working on their businesses.

From the foregoing, it is evident that more than 86% of working-age Americans are in employment. However, not all companies that these people work to offer a retirement plan. In the present employment environment, fewer employees stay loyal to a single company for long. Subsequently, companies seem to have given up trying to entice employees with pension schemes. Besides, many companies today are concerned more about operational and labor costs to increase profit margins. Therefore, such companies would rather not pay any pensions to their workforce.

Nevertheless, it is not all gloom for employees. There are still companies that believe in an organized retirement life for their workforce. Some of them are big multinational companies that are raking in immense amounts of profits annually. This article will rank the ten biggest companies that offer pensions in the United States.

Investors should consider the long-term implications of offering a defined benefit retirement plan as medical advances continuously extend the human life span. One of the reasons why old industrial behemoths like General Electric (NYSE:GE) is failing is that GE's current total pension obligations is around $92 billion. Little things add up.

Insider Monkey’s mission is to identify promising (and also terrible) stock pitches and share them with our subscribers. Our long strategy is based on the consensus picks of the 100 best performing hedge funds. This strategy was launched 5 years ago and generated a cumulative return of 115%. You can think of it as a mutual fund that returned 16.2% annually over the last 5 years, vs. 11.1% annual gain for the S&P 500 ETF (SPY). Basically we outperform the S&P 500 Index by 5 percentage points annually by identifying the top stock picks of the best hedge fund managers (see the details here) and avoiding stocks like General Electric that are held back by legacy costs of unsound business decisions.

As the methodology of this research on other big companies that offer pensions, we searched for companies that offer a defined-benefit retirement plan. Further, we looked at the size of the defined benefit assets for each of the companies for the year 2016. In the ranking, the first company had the largest size of defined benefit assets while the last company has the smallest among the ranked companies. We compiled data from a combination of SEC filings and quarterly financial reports.

  1. Dominion Energy Inc. (NYSE:D)

Dominion Energy offers a comprehensive retirement plan that incorporates two different designs. On the one hand, the company offers a traditional pension design where benefits are calculated based on average and service earnings. On the other hand, the cash-balance pension design is strictly based on the years of the employee’s service. This makes Dominion Energy one of the biggest companies that offer pensions. The company had $6.43 billion in total defined benefits assets in 2016.

[caption id="attachment_576714" align="aligncenter" width="750"] Suwin/Shutterstock.com[/caption]

Suwin/Shutterstock.com
  1. Eli Lilly & Co. (NYSE: LLY)

Eli Lilly & Co. offers a range of benefits to its employees that include profit sharing, stock bonus, 401(k) plan, and defined contribution pension plan. More important is the defined benefit pension plan to which all eligible employees have access. The total defined benefit assets under the control of the company were $7.16 billion as of 2016.

Eli Lilly
  1. Southern Company (NYSE: SO)

Southern Company offers a defined benefit pension plan to the approximately 30,000 people that it employs. The company helps the employees to prepare for life after employment. Towards this, the company maintains defined benefits assets that facilitate the pension plan. As of 2016, the total defined benefit assets was $9.46 billion.

[caption id="attachment_416809" align="aligncenter" width="750"] Joseph Sohm / Shutterstock.com[/caption]

10 Cities with the Worst Air Pollution in the US
  1. Merck & Co. Inc. (NYSE:MRK)

Merck & Co. Inc. is among the biggest companies that offer pensions to its employees. The company employs around 69,000 worldwide. These people work in the organization’s Pharmaceutical sector, animal health sector, and healthcare services sector. Merck offers a defined benefit pension plan to eligible employees who are automatically enrolled. The pension is awarded based on the years of credited service with Merck. The total defined-benefit asset for Merck was $10.04 billion as of 2016.

[caption id="attachment_364608" align="aligncenter" width="750"] 360b / Shutterstock.com[/caption]

Merck MRK
  1. Consolidated Edison of New York (NYSE:ED)

Consolidated Edison operates in the utility sector, where it employs around 15,300 people. The company conducts its business in New York City through subsidiaries. Core business operations include delivery of electricity, steam, and gas to over 3.5 million customers. The Retirement Plan covers eligible Con Edison retirees, which is a benefit plan that is tax-qualified. Con Edison had $11.89 billion in total defined-benefit asset as of 2016.

SunEdison SUNE Solar Panels
  1. Prudential Financial Inc. (NYSE:PRU)

Prudential Financial Inc. operates in the financial services sector where it employs a little over 50,000 people. The organization is one of the biggest companies that offer pensions to its employees. Prudential instituted the Prudential Supplemental Retirement Plan in January 1996 with immediate effect. All eligible employees can access retirement benefits at the end of their tenure. The organization maintains defined-benefit assets for use when a beneficiary's benefits are due. As of 2016, the total defined-benefit assets under the company's control was $12.14 billion.

[caption id="attachment_574188" align="aligncenter" width="750"] Iakov Filimonov/Shutterstock.com[/caption]

Easiest Countries to Become a Lawyer
  1. PG&E Corp. (NYSE: PCG)

Pacific Gas and Electric Corporation (PG&E) has operations in the utility sector. The company provides natural gas and electricity to households and industries in California, US. PG&E employs close to 23,000 full-time workers. These workers are eligible for a retirement benefits package once they last more than five years at the organization (assuming that PG&E itself can last for more than 5 years). PG&E has $13.63 billion in total defined-benefit assets.

Biggest Fires in US History
  1. JPMorgan Chase & Co. (NYSE:JPM)

JPMorgan Chase & Co. is the leading financial services institution in the world with assets worth $2.6 trillion. The organization employs more than 250,000 people worldwide. JPM has a retirement benefit plan available for all employees once they meet the criteria. The company’s total defined-benefit assets were worth $14.02 billion as of 2016. JPM is among the few private and most prominent companies that offer pensions in the United States.

[caption id="attachment_768154" align="aligncenter" width="750"] From calling Bitcoin a "Fraud" to possibly issuing their own stablecoin, JPMorgan's take on cryptocurrencies shows the classic signs of tech adoption over the years – If you can’t beat them, join them.[/caption]

From calling Bitcoin a "Fraud" to possibly issuing their own stablecoin, JPMorgan's take on cryptocurrencies shows the classic signs of tech adoption over the years – If you can’t beat them, join them.
  1. Johnson & Johnson (NYSE:JNJ)

Johnson & Johnson is a global conglomerate involved in the healthcare sector. The company segments its operations into Medical Devices, Pharmaceutical, and Consumer sectors. In total, Johnson & Johnson employs 134,000 people. Each of these employees is eligible for a defined-benefit pension scheme. As of 2016, the total defined benefit assets under the company's control were $14.36 billion. Johnson & Johnson allows new employees to join the scheme once they clock at least five years in their job.

[caption id="attachment_364467" align="aligncenter" width="750"] Niloo / Shutterstock.com[/caption]

Johnson & Johnson JNJ headache tylenol pain acetaminophen pill relief display health
  1. Kaiser Foundation Health Plan Inc.

Kaiser Foundation Health Plan Inc. is one of the biggest companies that offer pensions in the United States. The company is not-for-profit, and it operates in the healthcare industry. The organization serves communities in the US, where it offers individual and family healthcare plans. In 2016, the organization had $23.39 billion in total defined benefit assets. For any employee staying at the organization for more than five years, they can benefit from the assets.

[caption id="attachment_540488" align="aligncenter" width="750"] Ken Wolter/Shutterstock.com[/caption] Disclosure: None. This article was originally published at Insider Monkey.

Ken Wolter/Shutterstock.com