Editorials
Editorial: Pension maneuvers
01:00 AM EDT on Sunday, August 10, 2008
The Wall Street Journal has given readers, especially ones hoping to retire soon, another cause for anxiety about their financial futures. The paper said Aug. 4, in “Companies Tap Pension Plans to Fund Executive Benefits,” that some big firms, in a “dubious use of tax law,” have moved “millions of dollars of obligations for executive benefits” into the traditional pension plans basically set up for lesser employees, with the aim of getting the tax breaks afforded those plans.
The WSJ explains that when companies move such benefits (thus liabilities for the company) into such plans they can then use the assets — via tax-deductible contributions — to pay for executive pensions, deferred compensation and golden parachutes, even if, as in the case of many traditional pension funds these days, the plan is frozen.
These increased costs may cause the fund to become underfunded, especially in a bear market, such as now, and have to be taken over by the federal Pension Benefit Guaranty Corporation. When this happens, run-of-the-mill employees can stand to lose much of their pensions.
Let us hope that federal regulators start watching all this carefully. Apparently they haven’t so far.
| H1N1 and Pets: Felines, Ferrets and Flu | |
| Barrington's affordable housing puts opportunities within reach for mother, daughter | |
| Police seize large quantity of marijuana in Woonsocket |
We want to hear from you
More editorials
Most Viewed Yesterday
No driver’s license? For many, no problem
Some immigrants in Central Falls are afraid to give info to the government
PC 91, Stonehill 55: Peterson gets a lot done
Most active surveys
What's your favorite breakfast/lunch place?
Are the Yankees on the brink of another dynasty?
Will you allow your children to be vaccinated against swine flu? Why or why not?
Is it a bad thing or a good thing that prostitution is legal in Rhode Island, indoors?
Most e-mailed in the last 24 hours
Reader Reaction









You must be logged in to contribute. Log in | Register Now!
You are logged in as screenname | Log Out
You are logged in, but do not have a "screen" name. Create a Screen Name