Pension Plans in Peril

Wednesday, December 31, 2008

Find out why pension plans are often the first to go when a company is facing a major financial struggle, and how that’s affecting people around the country who rely on those pensions to pay for their retirement. Journalist Fran Hawthorne has been covering the pension industry for more than 20 years, and her recent book is Pension Dumping.


Fran Hawthorne

Comments [10]

David Smith from NYC

It seems advisable to me that whenever retiring from a company, one should take a LUMP-SUM DISTRIBUTION.

Get that money out of there!

Then take it and put it somewhere else (annuity). Self-manage, or find someone else to manage it.


Dec. 31 2008 12:34 PM
Tony from Downtown Brooklyn

Companies in Europe don't provide universal healthcare. Governments do. Your essential point(ie. the lack of universal healthcare in the US is a drag on US business among other things) is correct. However the blame is misplaced.
Your "of comparable quality" argument is debatable. True, GM and Ford have fine small cars, but I've not seen them in the US. That's because they're not sold in the US. They're not even available let alone marketed here. I'm quite sure if you looked at american car companies allocation of resources(production capacity, promotion, R & D) you'd find that it was weighted towards SUVs and trucks. That would include the lobbying spent to get the government to stifle the development of alternative fuel technology. Smaller cars played a much smaller role in the portfolio of US carmakers and they're now paying the price.

Dec. 31 2008 12:24 PM
EM from nj

Even profitable companies like Verizon, IBM and HP are doing away with their traditional pensions plans. This trend will continue as companies "benchmark" against their competitors - always using the lowest common denominator for employee benefits and the highest for executive compensation. Soon very few private employers will offer traditional pensions and it will be interesting to see if there is a backlash by private sector taxpayers who must fund their own retirement and also pay for the generous benefits that others receive.

Dec. 31 2008 12:24 PM
Dorothy from Manhattan

I retired in April 2007 -- I rolled over my 401K. My 401K had been invested in the "balanced" and "stable" options -- all other options were high front load mutual funds. Over the year between 4/07 and 4/08 I became a VERY conservative investor, heavily into money markets and CDs. Note that I took a very heavy hit on capital gains (on my taxable investments) for 2007 but it turns out to have been worth it.
A former co-worker with the same 401K investments as above lost 45% this year. I'm very glad I retired last year and set out to protect my principal.
Happy, healthy, prosperous new year for all...

Dec. 31 2008 12:24 PM
markBrown from and


1) CEO pay: any company taking FEDERAL funds:
may no longer pay more then 30 times the least paid employee on book.

2) If we say we want to save JOBS, we need to PUSH/shove the auto companies into NEW businesses

Dec. 31 2008 12:20 PM
rich from brooklyn

The US Car Market:
Your quest is not correct about Detroit making the wrong kind of cars and than indicating that the right ones are Hybrids.
Does she know that the Prius sells about 180,000 cars a year in a 16,000,000 (now it's a 11 million car market!?) car market.
Does she know that almost every Hybrid model has very slow sales except for the Prius. Does she know that Honda had to cancel their Accord Hybrid.

Dec. 31 2008 12:19 PM
sae from nyc

Please limit your discussion to pensions, which is something Fran Hoffman knows a lot about, and don't stray to automotive strategies, of which she is not an expert. We're all getting tired of the Monday night quarterbacking in regard to the auto industry. "why didn't they make more hybrids?" It's so convenient to blame the management instead of the millions of people lining up to buy SUVs when gas was cheap. Grow up people. Hybrid development always made a lot more sense internationally, where petrol is sometimes 3-4x the price we pay here. Note that hybrids aren't popular in countries like Indonesia or China where gas is cheaper and heavily subsidized. For once, consumers need to stop whinging and take their share of the blame.

Dec. 31 2008 12:18 PM
markBrown from and

Cutting CEO Salaries:

Any company taking federal money new requirement

CEO may make NO MORE then 30 TIMES more then the least paid employee on the payroll (or contractor)

ALSO a MMT. A MINIMUM milionaire tax

make more then 1 million dollars GROSS?

must pay AT least 1% of that in taxes!!!

Dec. 31 2008 12:18 PM
Tyrone from Bronx

your guest is completely off base. the largest problem with the auto companies is the union costs. GM for example has many small energy efficient cars of comparable quality tot the Japanese. if consumers wanted to buy their trucks over the last decade that was not the fault of the company (Toyota, Nissan, etc all have extremely large trucks as well, but this is always overlooked). All the legacy costs baked into the big 3 are what makes them uncompetitive financially at this point.

Dec. 31 2008 12:16 PM
markBrown from and


One problem is that We DON't Know if we want this auto bailout to SAVE the auto companies (I don't) or to save the JOBS (manufacturing) that the auto industry represents.

Until we have this answered we have no answer.

Also: if the AUTO companies and UNIONS had
given us UNIVERSAL Health care (like Europe) instead of only for the UNIONS, we might not be in this situation today
see my blog

Dec. 31 2008 12:14 PM

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