International Business Machines Corp. said today it will freeze the pension plans of some 120,000 employees in the United States, effective at the end of next year, and will offer instead a more generous 401(k) plan.

Traditional pensions, which typically promise a specific benefit based on pay and years of service, today cover some 34 million workers and retirees. They pay out some $120 billion in benefits annually, according to employer-group estimates.

Roughly 29,000 of these plans remain today, down from 112,000 in 1985. The surviving plans tend to be very large -- most of the decline has come at small employers -- and are concentrated in older, unionized industries such as the auto industry.

Washington Post article on IBM pension freeze.