UNDERFUNDED PLANS MAY HIT RETIREES, TAXPAYERS HARD
January 3, 2005
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Generations of Americans have counted on their pensions to carry them through the golden age of retirement. Yet increasingly they have discovered an unsettling trend: There are no guarantees.
One after another, corporations have thrown in the towel on their traditional pension plans, seeing the funds as too costly and too volatile to bear.
Steep downturns in industries such as airlines and steel have sparked a rash of bankruptcies, forcing many to default on their pensions or threaten termination.
“Companies see all this risk,” said Paul Klauder, managing director of SEI Investments, whose recent survey said that three quarters of chief financial officers believe that pensions are negatively affecting the financial health of their companies. “And now they have settled on an easy answer.”
SOURCE: James Paton, Rocky Mountain News December 25, 2004
