More Companies Ending Promises for Retirement
The New York Times
The death knell for the traditional company pension has been tolling
for some time now. Companies in ailing industries like steel, airlines
and auto parts have thrown themselves into bankruptcy and turned over
their ruined pension plans to the federal government.
Now, with the recent announcements of pension freezes by some of the cream of corporate America - Verizon, Lockheed Martin, Motorola and, just last week, I.B.M.
- the bell is tolling even louder. Even strong, stable companies with
the means to operate a pension plan are facing longer worker lifespans,
looming regulatory and accounting changes and, most important,
heightened global competition. Some are deciding they either cannot, or
will not, keep making the decades-long promises that a pension plan
involves.
I.B.M. was once a standard-bearer for corporate
America's compact with its workers, paying for medical expenses,
country clubs and lavish Christmas parties for the children. It also
rewarded long-serving employees with a guaranteed monthly stipend from
retirement until death.
Most of those perks have long since
been scaled back at I.B.M. and elsewhere, but the pension freeze is the
latest sign that today's workers are, to a much greater extent, on
their own. Companies now emphasize 401(k) plans, which leave workers
responsible for ensuring that they have adequate funds for retirement
and expose them to the vagaries of the financial markets.
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