The move of large corporations to freeze their defined benefit pension plans shows no sign of slowing down.

Last week, insurance giant American International Group Inc. became the latest major employer to disclose that it is freezing its pension plans, effective Jan. 1.

“After extensive research, we found that AIG's spending on employee retirement programs is materially higher than most of our peers, and that our programs are not in line with where the marketplace is headed,” Jeff Hurd, AIG executive vice president and head of human resources and administration in New York, wrote in a memo sent to employees.

AIG's move to freeze its two U.S. pension plans — one a cash balance plan design and other a final average pay plan, which together at the end of 2014 had $4.11 billion in assets and $5.77 billion in liabilities, according to AIG's latest 10K report — follows that of United States Steel Corp., which disclosed last month that at the end of the year it will freeze a pension plan covering salaried employees.

The decision of those two Fortune 500 companies to freeze their pension plans follows that of many other corporate giants who have taken the same action over the last few years.

For example, as of the end of June 2014 — the most recent period for which complete information is available — just 111 Fortune 500 companies offered a defined benefit plan to new employees. That's a 40% drop compared with 2008, when 185 big firms offered defined benefit plans to new salaried employees, and an even steeper fall — nearly 60% — compared with 2000, when 294 Fortune 500 companies provided the plans to new employees, according to Towers Watson & Co. surveys.

“It is only a minority of plan sponsors that still maintain ongoing plans,” said Matt McDaniel, a partner with Mercer L.L.C. in Philadelphia.

Several factors, experts note, have driven the corporate move to freeze their defined benefit plans. One was legislation Congress passed in 2006 that tightened pension plan funding rules by reducing, among other things, from 30 years to seven years the amount of time employers had to fund plan liabilities.

That meant employers had to kick in more money much faster to their plans when, for example, the economy plunged into a deep recession in 2008, sending the stock market into a sharp decline and almost overnight transforming overfunded plans into underfunded plans as the value of plan assets plunged.

“The bottom fell out of the market. That was very painful to plan sponsors,” Mr. McDaniel said, referring to the heftier contributions employers had to make to their plans at a time when corporate profits were falling.

Once a plan is frozen, its accrued liabilities still remain, but the action ends the addition of new liabilities.

Still, there are tradeoffs to the freezes. Typically, when employers freeze their defined benefit plans, they beef up their 401(k) plans. AIG, for example, will automatically contribute an amount equal to 3% of employees' salaries, starting next year.

But one downside for employers who make 401(k) plans their exclusive retirement plan: When employees' account balances plummet, such as when the stock market tumbles, employees nearing retirement will be less likely to retire.

“At a time when employers, because of an economic downturn, need fewer employees, there will be more employees who can't afford to retire. That puts pressures on employers,” said Alan Glickstein, a senior Towers Watson retirement consultant in Dallas.

The flip side is when the economy is booming and the stock market is soaring, employees, with hefty 401(k) plan account balances, will be more likely to retire at a time when employers most need them, Mr. Glickstein said.