Oct 25 Fannie Mae and Freddie Mac
on Friday said they will terminate their traditional
employee pension plans by the end of the year, at the direction
of the regulator of the government-controlled mortgage
Edward DeMarco, acting director of the Federal Housing
Finance Agency, said ending the defined benefit plans
"eliminates risk to Fannie Mae and Freddie Mac and helps to
conserve their assets on behalf of taxpayers, one of our main
priorities as conservator."
The plans had previously been closed to new entrants.
Employees of both companies may choose a pension annuity, or
roll over their benefits to other defined contribution plans
such as a 401(k) or an individual retirement account.
Many U.S. companies have in recent years frozen or ended
their traditional pension plans to save money and reduce
potential payouts, while shifting the burden of investing to
As of February 2013, Fannie Mae employed about 7,200 people,
while Freddie Mac employed about 5,000. Both were seized by the
U.S. government in September 2008 amid soaring mortgage losses.