Stock Losses Leave Pensions Underfunded by $400 Billion

[sabra]

Source: WP

The collapse of the stock market last year left corporate pension plans at the largest companies underfunded by $409 billion, reversing a $60 billion pension surplus at the end of 2007, according to a study released today.

Shoring up the plans could cause further pain for workers, businesses and the struggling economy at a time when they can least afford it, pension specialists said.

"The chaos that has been observed in the world's financial markets over the last 12 months has had a major adverse impact on pension plan funding and will negatively impact corporate earnings," the Mercer consulting firm reported today. "Moreover, the trend in recent months has been one of alarming deterioration," Mercer said.

As Mercer and other pension specialists described it, the pension problem illustrates how the recession and the meltdown in the financial markets can become self-reinforcing.

Read more: http://www.washingtonpost.com/wp-dyn/content/article/2009/01/07/AR2009010701387.html?hpid=topnews

[xchrom]

1. recommend

[pattmarty]

2. This is the one thing that worries my wife and me in this mess.......

.........as we live on my modest pension from the Teamsters Union. I will be getting my (early 62 yo)Social Security beginning this month also. If my pension holds, we should be ok thru this whatever it'll be called recession/depression.


Edit to add: It's the working folks that I worry about.

[GoesTo11]

3. That's a lot, but not that much.

That comes out to a few thousand dollars per worker. I would be ecstatic to have only lost a few thousand dollars, but I have a 401k not a pension, and I lost a lot more than that.