Well, at least it's fair that Wall Street is still on target to receive $70 billion in bonuses. They tried and that's all that matters. For everyone else, let's see how well year end bonuses and end of year perks go. Companies are pushing more health care costs out to employees and now pension plans are reporting problems with funding and the few that remain in corporate America are talking about cutbacks, problems with funding and even cancellations and moving to 401K plans.
US corporate pension funds are getting slammed by the stock market's downturn, squeezing profits and prompting some employers to drop their pension plans or make other cuts to offset losses.And in the 401K world, it's not much better. Cutbacks (or total removal) of matching dollars is likely to be the next casualty as GM announces their policy change.
Just last week, defense giant Lockheed Martin Corp. cut its earnings forecast, citing higher pension costs; its retirement investments had dropped 25 percent this year. Boeing Co. estimated its pension fund was down 20 percent this year, likely forcing it to pump in $100 million more. And Raytheon Co., based in Waltham, said it plans to boost contributions to its pension fund by an extra $94 million next year, partly because its pension fund has shrunk 20 percent since January.
"We're going to have a very bad year," said Howard Silverblatt, an analyst with Standard & Poor's, a financial research firm based in New York. "Companies are going to have to put significant amounts of money in [pension funds] this year."
As if your 401(k) hadn't been through enough.
American workers, forced to look on helplessly as the value of their 401(k)s sink in sync with the Dow, now have something else to worry about. On Wednesday, General Motors told its nonunion employees that starting next month, it would stop matching their contributions to their 401(k) plans until business conditions improve.
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