| Hard working loyal employee for 25-30 years, | | | | corporations "Book" their future retirement |
| looking forward to a beautiful retirement, | | | | obligations on current financial statements, |
| only to find out that their promised company | | | | it is likely that the trend toward dropping |
| pension may have already been stolen. | | | | pensions will become a landslide in the next |
| Farfetched? No. | | | | decade. |
| | | | |
| In one year alone, 2005, about 120 | | | | As it is now, they have dramatically reduced |
| corporations dropped their employee pension | | | | pension payments to those retirees whose |
| plans. On average, only one out of five | | | | plans they have taken over to try to stretch |
| corporate employees in America is covered by | | | | out the remaining money. |
| a traditional corporate pension plan today. | | | | |
| | | | A treacherous feature of the PBGC's pension |
| The problem is that of those corporations who | | | | payments is that you are not sure that you |
| still have pension plans, 80% are running out | | | | will not have to pay back a certain |
| of money and will never be able to pay full | | | | percentage of the money you are paid by them |
| benefits and may drop their plans completely. | | | | until your payment level is certified; a |
| | | | process that, somehow can take years. |
| Looked at another way, 8 out of 10 corporate | | | | |
| benefit plans are under-funded. As a result, | | | | The trend toward bankrupted and abandoned |
| U.S. corporations are defaulting on their | | | | pension plans will also accelerate as the |
| existing pension obligations at an alarming | | | | Baby Boomers queue up to get theirs only to |
| rate: | | | | find that their companies have been playing |
| | | | fast and footloose with the regulations that |
| - Major airlines such as Northwest and Delta, | | | | let them raid their employee pension plans |
| recently persuaded a Federal bankruptcy court | | | | and/or significantly under fund them. |
| to delay or terminate their pension | | | | |
| obligations to their retiring employees. | | | | It amounts to nothing less than malfeasance |
| | | | to the loyal hardworking men and women who |
| - Health care benefits for pensioners are | | | | made these companies successful. |
| particularly vulnerable and will gradually | | | | |
| disappear. GM's outstanding unfunded | | | | The future does not look good, retirement |
| healthcare obligations, at an unfathomable | | | | wise, for those who expect to retire in the |
| $64 Billion, are 25% more than its entire | | | | next 20 years or so. You should expect to |
| market capitalization! | | | | have to augment or replace your pension with |
| | | | private resources or expect to have to work |
| - Inexplicitly, a company such as ExxonMobil, | | | | until you can no more. Forget about company |
| with the biggest quarterly corporate profit | | | | supplied health care coverge for retirees. |
| on record in history, recently announced that | | | | |
| it has under-funded its pension plan by $11.2 | | | | This will become the accepted norm for later |
| billion. That was not an oversight. They gave | | | | generations. Corporate pensions will have |
| departing CET Lee Raymond a $400 million | | | | become quaint notions. Unless you have an IRA |
| dollar retirement package. Can the government | | | | or a 401(K), you will be penniless when you |
| help? | | | | retire. |
| | | | |
| It should, they were the ones that allowed | | | | In the mean time, what are you going to do, |
| corporate raiders, such as Dick Cheney to | | | | turn to family and friends or charities? If |
| siphon off retirement funds and consistently, | | | | you are in your late 40's or 50's, you will |
| though legally, under fund them. Don't count | | | | have to go into emergency mode and start |
| on the US government to keep your pension | | | | saving prodigious proportions of your salary |
| checks coming if your company runs out of | | | | for the balance of your working life and/or |
| money. | | | | make investments that will be able to support |
| | | | you when you retire. |
| The Pension Benefit Guarantee Corporation | | | | |
| (PBGC), has a whopping $23 billion deficit | | | | If you are already in your 60's, you will |
| and it is the Federal body charged with | | | | probably just squeek under the wire, but your |
| insuring corporate pension plans that have | | | | payments and health benefits will probably |
| defaulted. In the last 30 years, the PBGC has | | | | gradually be reduced as the years go by. |
| been forced to take over 3,400 pension plans. | | | | |
| | | | By the way, I would not look to Social |
| With accounting practices now demanding that | | | | Security to pick up the slack any time soon! |