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