Question: I'm 57 and have a defined pension plan at work. At age 62, I can retire with a lump payment of just over $831,000 or I can get a monthly annuity payment of almost $5,400 for the rest of my life. What should I consider in choosing between these two options? --Bob Rozak, Germantown, Maryland
1. Many pension plans are underfunded
The Pension Benefit Guaranty Corp., which guarantees private pension payments for 44 million Americans, said on Wednesday that it faces a massive, unprecedented deficit.
Big news of the day is the TV stuff I reported last night, with NFL Network and the league finally smoking the peace pipe with Comcast. Read the whole story here.
Even as the nation's economy is showing some tentative signs of bottoming out, another calamity looms: the public pension bomb.
Question 1. We would really like to get rid of the house, but we don't want to let it go into foreclosure. Someone mentioned a short-sale. If our lender agrees, should we try this? What impact will it have on our credit rating? - Confused in California
You may think that pensions are as dated as the proverbial gold watch. That's understandable. After all, they're arcane and rarely publicized (except to say how they are disappearing), and it's often unclear how much they're really worth. But understanding your pension will help you plan for retirement and value yourself better in the workplace. Here's what you should do.
Last week's West Virginia election should frighten you.
The jig is up. For years, politicians have been playing what amounts to a multi-trillion-dollar shell game with state and local pensions. They've doled out lush retiree benefits to their heavily unionized workforces, knowing that they could shove the cost for those benefits onto future generations of taxpayers.
With the stock market cratering, and once-venerable financial institutions biting the dust, you might be wondering about the safety of your traditional pension plan. I've got some good news and some bad news.
Question: I'm 57 and have a defined pension plan at work. At age 62, I can retire with a lump payment of just over $831,000 or I can get a monthly annuity payment of almost $5,400 for the rest of my life. What should I consider in choosing between these two options? --Bob Rozak, Germantown, Maryland
1. Many pension plans are underfunded
The Pension Benefit Guaranty Corp., which guarantees private pension payments for 44 million Americans, said on Wednesday that it faces a massive, unprecedented deficit.
Big news of the day is the TV stuff I reported last night, with NFL Network and the league finally smoking the peace pipe with Comcast. Read the whole story here.
Even as the nation's economy is showing some tentative signs of bottoming out, another calamity looms: the public pension bomb.
Question 1. We would really like to get rid of the house, but we don't want to let it go into foreclosure. Someone mentioned a short-sale. If our lender agrees, should we try this? What impact will it have on our credit rating? - Confused in California
You may think that pensions are as dated as the proverbial gold watch. That's understandable. After all, they're arcane and rarely publicized (except to say how they are disappearing), and it's often unclear how much they're really worth. But understanding your pension will help you plan for retirement and value yourself better in the workplace. Here's what you should do.
Last week's West Virginia election should frighten you.
The jig is up. For years, politicians have been playing what amounts to a multi-trillion-dollar shell game with state and local pensions. They've doled out lush retiree benefits to their heavily unionized workforces, knowing that they could shove the cost for those benefits onto future generations of taxpayers.
With the stock market cratering, and once-venerable financial institutions biting the dust, you might be wondering about the safety of your traditional pension plan. I've got some good news and some bad news.
Middle-class Americans aren't the only ones worried about how the market has drop-kicked their retirement funds. U.S. companies are also looking at big losses in their pension funds - losses that could force them to dip into earnings to cover their employee obligations.
Motorola, Inc. said on Wednesday that it is freezing employee pension plans and no longer matching 401(k) contributions as a result of the economic crisis.
Without a doubt, the past few months have ranked as the most tumultuous - and scariest - times that I've seen in the more than 20 years I've been at Money magazine. We've witnessed events that up to now had been almost unimaginable: the stock market fluctuating wildly and governments around the globe taking extraordinary steps to unlock frozen credit markets. And it's still unclear when the economy and the markets will hit bottom.
1. My wife and I are both retired and we depend on our private pension and other small investments for our income. We are both very concerned and afraid that within the next 6 months there will be nothing left. - Jack
Are you happy with how well your mutual funds are doing?
Falling stock markets around the globe and the credit crunch are putting the pension funds of some of the largest U.S. companies into deeper financial holes, according to a report released Monday.
If you're one of the lucky 30 million American workers still covered by a traditional defined-benefit pension plan, you'll likely be faced with a crucial and irrevocable decision when you retire: should you take your pension in the form of a guaranteed monthly check for life or should you grab all of your pension money up front and manage the funds yourself? The vast majority of retirees choose the lump sum - 90% of them, according to the Society of Actuaries. Before you join them, consider the risks.
You know how good it feels when you fish a $10 bill out of your jeans pocket right before it hits the wash. Imagine coming into hundreds of dollars from a savings bond or a bank account you forgot about.
Like many successful business owners, Bob Johnson, founder and CEO of Johnson Insurance & Financial in McKinney, Texas, was hungry for juicy tax breaks. He found some - more than $200,000 in just three years - in an unlikely place: the old-fashioned defined-benefit pension plan.
Both events were as widely expected as they were painstakingly choreographed
New regulations intended to protect workers' pensions may have the opposite effect, leading some companies to stop offering the plans altogether.
Question: My wife and I are planning to retire next year when I'll be 59 and she'll be 60. Together we have about $600,000 in a 401(k), plus I have a pension that I can take as a lump sum of approximately $1 million or as an annuity that will pay $60,000 a year to me or my wife as long as one of us is alive. I'd prefer to take the lump sum and invest the money myself. I'm thinking of laddering bonds plus investing in some mutual funds to hedge inflation. What do you think of my plan? - Peter, Princeton, New Jersey
On its face, a drive to force public pension funds to halt investment in companies operating in countries believed to be sponsors of terrorism - primarily Iran - is in full swing. Presidential cand...
Q. My company just switched from a traditional pension plan to a cash-balance plan. Should I be worried?
The agency that guarantees workers' private-sector pensions is now in better financial shape than it was last year.
The more than 78 million baby boomers approaching retirement face a financial landscape that offers reasons for hope, but the generations following them have reasons to worry.
My husband is 45 and has worked for the same company for 27 years. He has been given a separation package that requires him to make complicated retirement decisions, the main one being whether he should take his company pension in monthly payments for life or as a lump sum. What should he do? Help!!! - Val, Tonawanda, New York
A group representing retired pilots is asking for a delay in a bankruptcy court hearing into whether the airline can dump its pension plans on a federal agency, saying new legislation may allow the troubled airline to hang onto its retirement plan.
The pension law signed by President Bush last week will have its primary impact on tens of millions of private-sector workers who have defined benefit pension plans and defined contribution plans such as 401(k)s.
One of the most sweeping reforms of the retirement plan universe was signed into law by President Bush on Thursday afternoon, promising to bolster pension plan funding and increase workers' retirement savings.
A pension reform bill moving through Congress includes a clause to allow hedge funds to manage significantly more pension-fund money, according to a published report.
Legislation expected to be voted on in Congress as soon as this week to reform the nation's private pensions could actually increase the burden on the federal pension agency, according to a published report.
General Motors cleared a major hurdle in its efforts to sell its GMAC finance unit as the federal agency that insures pensions said the buyer won't be held responsible for the automaker's obligations to retirees.
Lawmakers negotiating pension reform legislation may have reached a tentative agreement on what to include in a final bill that would toughen funding rules for defined-benefit plans and encourage savings in 401(k)s.
QUESTION: When I retire, I'll be eligible for a pension from two companies. My question: should I take my pension in a lump sum or in annuity payments that will last the rest of my life? I'm leading toward a lump sum because I figure by investing it I can better hedge against inflation. Do you think that's the best approach? -- Bud C., Conyers, Georgia
From the "no rest for the weary" files comes this mini-dilemma:
The Art of Digging for a Lost Pension
By now most everyone knows that the old-style pension is in a heap of trouble. Desperate companies like UAL have already dumped plans. Other basket cases such as Delphi and Delta are threatening to...
Delta Air Lines will move to terminate its pilot pension plans Monday, attempting to shift responsibility for the future benefits to the federal agency that guarantees such payments.
If you've earned a monthly pension check under your employer's defined-benefit pension plan, the odds are good that you'll get at least some money, even in the worst-case scenario.
By now most everyone knows that the old-style pension is in a heap of trouble.
The U.S. pension insurer has appealed a bankruptcy court decision allowing Delta Air Lines Inc. to implement a new pilots' contract that includes payments to pilots in case their pension plan is turned over to the agency.
A U.S. bankruptcy court judge approved a deal for a new contract between Delta Air Lines Inc. and its pilots, who had ratified the new contract earlier Wednesday.
More than 350 S&P 500 companies still have pension plans...and thanks to the recent rise in interest rates and stock prices, about one-half of those plans are at least fully funded, according to Ron Gebhardtsbauer, senior pension fellow at the American Academy of Actuaries.
THE ANNUAL REPORT, or 10-K, that General Motors just filed with the Securities and Exchange Commission catalogs every petrifying financial risk known to man. But deep in the report is a shining sta...
The annual report, or 10-K, that General Motors just filed with the Securities and Exchange Commission catalogs every petrifying financial risk known to man. But deep in the report is a shining statistic: In 2005, GM's pension fund earned 13%. For a simplistic comparison, take the S&P 500, which had a total return for the year of only 4.9%.
NEW YORK (CNNMoney.com) - Cognitive Dissonance 101 might be a fitting title for the findings from the 2006 retirement confidence survey released Tuesday by the Employee Benefit Research Institute.
NEW YORK (CNNMoney.com) - Shortchanged is a polite way to describe how employees might feel when their companies announce they're going to freeze their pension plans.
When IBM announced that it would freeze pension benefits in 2008 for 117,500 U.S. employees, it felt like the New York Yankees declaring that players would have to buy tickets to fly on the team je...
The federal agency that insures private pension plans intends to sell half of its 20 percent stake in UAL Corp., which is due to emerge from bankruptcy protection Wednesday, according to a published report.
Are defined-benefits pension plans sustainable?
Some of the nastiest conflicts in America's future have recently begun to reveal themselves. Let's call them, broadly, the pension wars.
Some of the nastiest conflicts in America's future have recently begun to reveal themselves. Let's call them, broadly, the pension wars. They will be fought on a wide range of battlefields, involvi...
NEW YORK (CNNMoney.com) - Reliable income for life. Most people want it, but fewer and fewer workers can count on it.
NEW YORK (CNNMoney.com) - A thumbs-up this week from the United Auto Workers on a revised version of a pension reform bill helped smooth the way for its passage in the House of Representatives on Thursday afternoon.
Social Security reform, bankruptcy reform, tax reform - add pension reform to the mix.
Pension plans that are facing a growing number of retirees are seeking bigger returns by pouring billions of dollars into hedge funds, investments that may be risky, a news report said Sunday.
My wife plans to retire in two years at age 48. When she does, she has the choice of taking a $350,000 lump-sum payment or having her company pay her a pension of $1,600 a month for life. What would you advise?
General Motors' pension pain could soon spread to hundreds of other companies, even those offering relatively healthy traditional pension plans.
The bankruptcy by auto parts maker Delphi Corp. could mean an $11 billion hit to its former parent General Motors Corp., according to the automaker, and thousands of job cuts at Delphi's North American parts plants.
The federal government contends that General Motors' pension fund is $31 billion short of what it owes its work force and retirees, a figure strongly disputed by the automaker, which argues its plans have $2 billion more than necessary to cover anticipated benefits, according to a published report.
The bankruptcy of Delta Air Lines and Northwest Airlines could add billions of dollars to the government's already overburdened back-up pension scheme. If your company goes bust, will the emergency fund still be there to pick up the tab?
If you're one of the 23 million or so people who work for a company with a traditional pension--that is, a plan that gives you a monthly check based on your salary and number of years of service--y...
The captains of American corporate life could learn much about how real leaders treat their troops from the captains and the lieutenants of the United States Marine Corps.
If you're one of the 23 million or so people who work for a company with a traditional pension -- that is, a plan that gives you a monthly check based on your salary and number of years of service -- you may think the main threat to your retirement is your company defaulting on its promise to pay. That's what bankrupt United Airlines did in May.
The federal agency insuring private-sector pension plans that have promised benefits to about 44 million employees and retirees could see its own shortfall more than triple in the next decade, a congressional agency said Thursday.
United Airlines used loopholes in federal pension laws to treat its pension funds as solid for years, when in fact they were dangerously weakening, according to a published report.
Many of the nation's private sector pension plans are seeing a bigger gap between their assets and their promised benefit levels, according to a published report Tuesday.
After reading about the people at United Airlines losing their pensions, I'm beginning to wonder whether my pension is safe. Should people like me who have a corporate pension be concerned about losing our benefits?
FOR THREE BRUTAL YEARS THE TOP BRASS at America's old-guard airlines have been telling anyone who would listen, off the record of course, that a single watershed event is all they need to put their...
As if you don't have enough to worry about with 401(k) and Social Security benefits, here comes a new retirement woe: traditional pension plans may be in the worst shape of all.
The Securities and Exchange Commission said Monday it has discovered that pension consultants -- who advise companies on pensions and 401(k) plans -- have serious conflicts of interest and may be giving out biased advice.
Some United Airlines employees at risk of losing their shirt are taking it all off instead.
Commencement last week of a trial in U.S. Bankruptcy Court in Chicago on whether to void the current labor contracts of two unions representing workers at UAL Corp.'s (UALAQ) United Airlines appeared to have jump-started parallel negotiations between the airline and its mechanics, ramp workers and customer-service agents.
IN HIS RECENT STATE OF THE UNION speech, President Bush waxed rhapsodic about the benefits of partially privatizing Social Security. "You can build a nest egg for your own future," he said. "Best o...
The New York State pension fund sued Merck & Co. Tuesday, claiming to have suffered huge financial losses from the scandal surrounding the drugmaker's Vioxx painkiller.
Teamster union-controlled pension funds are in worse shape today than in the era of union corruption when money from the funds were used by mobsters to buy casinos in Las Vegas, according to a published report Monday.
THE HEADLINES TELL THE TALE: Companies are abandoning pension and health-care benefits for both active employees and retirees. IBM helped start the trend in the 1990s, when it tried to switch rough...
Shouldn't there have been a shake-out by now?
Traditionally, pensions have been the gold standard of retirement plans. Let's face it, if you have the option of funding your own retirement or having someone else do it for you, you'd take the free ride, right?
US Airways Group headed to bankruptcy court Monday to seek permission to keep flying during its second bankruptcy filing in two years.
US Airways faces a serious risk of going out of business, according to some leading airline analysts, despite claims by the CEO of the nation's No. 7 airline that no liquidation is imminent.
A panel has rejected a third request for federal loan guarantees from bankrupt United Airlines, saying Monday it will not entertain any more requests for help from the nation's troubled No. 2 airline.
Let's just call it what it is: gaming the system. And it's a game that has already resulted in skyrocketing tax increases and the loss of public services across the country--from the shutdown of li...
When asked how long it will take for the world's population to double, nearly half of all Americans say 20 years or less. That's hardly surprising, given the crowding many of us encounter in everyd...
Corporate chieftains and investors should prepare for more boardroom and management changes as mutual fund managers and private pension funds join the proxy vote battle formerly led by the public pension funds.
If you call the main number of Bethlehem Steel, and cool your mind while the polite, automated female voice on the other end tells you what to do if you know the four-digit extension of the person ...
To visit the unofficial world headquarters of shareholder activism, you have to fly to Sacramento and locate the government office building that is home to the 1,600 employees of the California Pub...
There's full disclosure, partial disclosure, and the disclosure some venture capital firms are seeking: none.
For a brief, shining moment, it looked as if outrage had finally triumphed over excess. Earlier this month, soon after Delta Air Lines disclosed that CEO Leo Mullin had hauled in a bonus of $1.4 mi...
As she moved up the ranks at AT&T, the last thing Jane Banfield worried about was her pension. She'd started out in sales in 1982, worked her way up to management and, by the late '90s, was startin...
(O)n or about December 2001, the 401(k) dream died. After Enron employees saw their company-stock-laden retirement funds fall to pieces, even those of us with less go-go 401(k) investments woke up...
As she moved up the ranks at AT&T, the last thing Jane Banfield worried about was her pension.
On a cold Philadelphia day this past February, 50-year-old Janice Winston received something that warmed her considerably: a $400,000 payment from her former employer, Verizon Communications. The m...
When it comes to Detroit's Big Three automakers, UBS Warburg's Saul Rubin hardly seems bullish. He believes vehicle sales will continue to slow--possibly for years. He also argues that Detroit will...
One week, the Wall Street Journal proclaims on the front page that there is no pension crisis; the next week, Fortune compares pension problems to the lurking menace in Nightmare on Elm Street. All...
Of all the things that could keep investors up at night--chief executives being hauled away in handcuffs, the possibility of a double-dip recession, the threat of a war in Iraq--the state of corpor...
Not long ago, the stock market reigned supreme, CEOs were worshiped like baseball heroes, and Sept. 11 was just another day on the calendar. In those heady times, employers creatively enhanced thei...
Do Core Earnings Measure Up?
PART ONE
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