What’s in your wallet? Pensions and you.


Movie Guy, in comments, provides a beginning glimpse at trends in the realms of retirement funding:

Retirement funds in danger for millions of Americans
By Mike Bryan
6 March 2009


Between October 9, 2007, and October 9, 2008, equity assets in retirement plans dropped by about $4 trillion in value, according to the CRR study. State and local government defined benefit plans dropped by about $1 trillion, private employer defined benefit plans dropped by about $900 billion, private employer defined contribution plans dropped about $1.1 trillion, Individual Retirement Accounts dropped about $800 billion, and federal government thrift plans dropped about $100 billion.

These dramatic shortfalls create particular problems for private employer defined benefit plans. The Pension Protection Act of 2006 contains guidelines by which a plan sponsor must eliminate any shortfall between promised benefits and assets. The CRR study estimates that “firms are going to have to increase contributions by about $90 billion in 2009.” Mercer, a global consulting firm, places the underfunding of corporate pension plans at $409 billion.

“This challenge raises the question of firms laying off workers, freezing their pensions, or going bankrupt,” states the CRR (Center for Retirement Research at Boston College) study.


Companies That Have Changed or Temporarily Suspended Their 401(k) Matching Contributions
As of 5 March 2009
Pension Rights Center

Companies That Have Changed Their Defined Benefit Pension Plans
As of 2 March 2009
Pension Rights Center

Companies Suspending or Reducing 401(k) Contributions, 2008-2009
As of February 2009
Center for Retirement Research at Boston College


Comments did not elaborate on this post first about pensions not meeting current obligations for the soon to retire (in the decade or so), and for younger workers whose 401ks will suffer tremendously if this remains an L shaped recession (or a slow and flat recovery over time), wages remain flat as in the last decade, and inflation takes off in the future. How does one present different scenarios?