Word: pensioneer
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...Company pension plans, however, have other problems. Most firms invest about 8% of their payroll costs in a pension fund to meet retiree requirements, but some cash-short companies have cut back on pension fund contributions. The result is a shortfall in the amount of money needed to meet pension obligations...
Three of the largest U.S. companies-Chrysler, International Harvester and Bethlehem Steel-together have unfunded pension liabilities that now total billions of dollars...
Seven years ago, Congress enacted legislation to assure that private pension programs will pay workers the benefits they are promised. If a company goes bankrupt, the Government-backed Pension Benefit Guaranty Corporation will make payments. But the failure of a large firm like Chrysler could virtually drain the $332 million now available to bail out private pensions...
...greater problem is that private pensions have not fully faced up to inflation. The Committee for Economic Development, a business study group, warned last month that future retirees may face "insecurity and hardship" unless Social Security is reformed and private pension plans find a way to expand benefits. Said a CED report: "A retirement disaster is on the way early in the 21st century...
Unlike Social Security, almost no private pension program automatically takes inflation into account in calculating post-retirement benefits, even though price increases can wipe out the value of a pension. An annual inflation rate of 10% will halve the buying power of a retirement check in about seven years. Someone who lives 15 years after retirement at 65, the normal lifespan today, would be receiving a pension worth only about 25% of its original value at the time of his death. Concedes John Balch, vice president and treasurer of the Jewel Companies, a supermarket and drugstore chain: "In most cases...