State Street Corp. is the latest among a growing number of companies to shift its emphasis from traditional pension plans to defined contribution plans.
The world’s largest institutional money manager said it is discontinuing contributions to its defined benefit plan for new employees. At the same time, the company said it was taking steps to make participating in the company’s 401(k) plan more attractive to its employees.
State Street will match 100 percent of a participant’s contribution, up to the first six percent of their salaries — double what the company currently matches.
In addition, employees who don’t currently participate in their 401(k) plan will be automatically enrolled to save three percent of their pay, according to the Boston Globe.
The automatic contribution will increase by one percent a year, to six percent of total pay, unless employees opt out of the plan, according to the paper. Such automatic enrollments have become a growing trend since Congress allowed them last year.