Clown-Free Zone... sorry, no clowns allowed Message Board

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Pastimes : Clown-Free Zone... sorry, no clowns allowed

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To: sammaster who wrote (123493)	9/18/2001 8:48:13 PM
From: Alias Shrugged	Read Replies (1) of 436258

Pensions (ie, amounts payable from Defined Benefit Pension Plans) are guaranteed by the Pension Benefit Guaranty Corporation. Plan sponsors pay annual premiums to the PBGC; the more poorly funded the plan, the higher the premiums. There are limits to the guaranteed benefits. Most plans are still in good shape, but may require corporations to begin contributing cash again. Also, lots of companies were realizing "pension income" on the income statement due to the overfunded plans; the income will certainly decrease or flip over to an expense item. Some plans were in bad shape (think of Steel companies and maybe airlines) and obviously the last 18 months of asset performance have not helped. Some of these plans may need to be taken over by the PBGC. A typical asset allocation would be 60% equities and 40% fixed income.

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