The Math of Pensions

This is a great article to share with someone who is “saving for retirement” and that plan relies mailnly on receiving a pension for their economic well being. The article is in today’s NY Times. The pension Benefit Guaranty corporation claims that General Motors’ pension fund is $31 billion short of what it owes its work force-GM contends that its pension plans are” fully funded”! Unfortunately they are both right depending on how you do the math. The take away from this story is if GM ever/when they claim bankruptcy, many workers will see their pension decimated. I learned something new from this article-companies with weak pension funds have been required by law to calculate the value of their pension funds on a termination bases and send the information to the pension guaranty agency. But congress also enacted a measure keeping the information secret! Please…If you know someone who is planning on a company pension for their financial well being, share this article with them and have a fabulous week!

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Dansette