More than 12,000 employees of the U.S. government-backed mortgage giants Freddie Mac and Fannie Mae will lose their pension plans at the end of the year.

The move comes at the behest of the Federal Housing Finance Agency, which has been the conservator for the two companies since 2008 when huge losses required a $188 billion bailout. A memo to staff, first reported by the Washington Post, said the pension was being eliminated "to manage the cost of the retirement benefits at a more predictable rate and to limit long-term liabilities."

Pension plan participants will be able to roll their benefits into an annuity or defined contributions account. Freddie Mac and Fannie Mae said they plan to offer a 401(k) to replace the current pension system. Employees hired after Dec. 31, 2011, had been barred from enrolling in the pension plan.