If the company matches the 401(k) at 3.5%, they would be making money as long as the employee didn't max out their 401(k). If you put in the max amount for those of us under 50 of $15k, you would only get $525 bucks match, and that is over the course of the year, vice matching 50% of the first $1k (and getting the current $500).

I don't disagree that their are potential risks in having a defined benefit plan, the key is to maximize the benefits that it brings to us in retirement while minimizing that risk. Give the R&I guys a call and ask them how they would like to plan on doing that, hopefully you will get some reassurances that this issue has been looked at and will continue to be looked at.