For Your Entertainment (FYE)! Then maybe not, this is your pensions they are talking about………:+(
“Deteriorating conditions in the U.S. pension system are jeopardizing the lump sum payouts workers count on, and pushing some workers to retire ahead of schedule.”
“Stock market losses began dragging down pension assets a few years ago, but the current near-zero interest rates — intended to spur the American economy — have worsened the problem and created the largest gap in assets and liabilities since the end of World War II.
“While low interest rates help people borrow money, they dramatically shoot up the pension obligations of plans,” said Rebecca Davis, an attorney at the Pension Rights Center in Washington.”
“And the problem isn’t unique to the U.S. A new study from consulting giant Mercer said the problem is global in scope. The sustainability of pensions in other countries is also at risk, according to the 2011 Melbourne Mercer Global Pension Index released on Tuesday”. ”
“That’s the kind of uncertainty prompted American Airlines Captain Rod Carlone to leave the work force last month, much sooner than he had expected. Carlone said he did not want to risk missing out on a lump sum payment if the American Airlines Pensions Inc. Pilot Retirement Benefit Program Fixed Income Plan (the pilot pension plan) was underfunded. After almost 24 years at American [AMR 2.94 -0.02 (-0.68%) ], he flew his last flight on Sept. 30 from Dallas to Los Angeles.”
“”I can’t afford at almost 62 a financial setback I could not recover from,” Carlone said. “I live in Las Vegas, and this is one wager I didn’t want to make.””
“How do you know if your pension is in trouble? Companies must notify workers if a plan falls below 80 percent funding. Plans with a funding level below 60 percent are forced to freeze and to provide only an annuity.”
” Davis recommends that workers stay on top of a plan’s funding status by reading the fund’s annual report, typically sent by mail. Plans must provide additional notices when benefits are restricted because of pension underfunding.
Historically, most people eligible for a lump sum take it rather than choose a lifetime annuity.”