Quote:
Originally Posted by Chi-Town
No doubt that shareholders who rode the stock down took a hit, but pensioners lose their comfort level in retirement by no fault of their own.
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Freezing a pension plan doesen't relieve a company of the obligation to pay pensioners all retirement benefits earned up to the freeze date. It simply eliminates accural of additional plan benefits from the freeze date going forward. My companies plan was frozen three years before I retired. I worked there for 25 years but only earned pension benefits for the first 22 years. I feel very fortunate to have worked for a company that still had a defined benefit plan in place for most of my career. Unfortunately, Defined benefit plans (at least for private companies) will soon to go the way of the dinosaur. A companies success or failure should be based on their ability to compete in the businesses it specializes in. Taking on huge liabilities that fluctuate with market returns is not consistent with sound business practices. I guess that is why many public entities still have defined benefit plans, since they can put taxpayer money at risk as opposed to shareholders.