Pension plans have long been offered as part of employee benefit packages. Long thought to be an integral part of any retirement plan. But in todays environment, with large corporate bankruptcies and massively underfunded pension programs, do you still rely on your Pension plan?
For years individuals have relied of defined benefit pension plans offered by their companies. Years ago it was sometimes seen as all the retirement planning that most individuals would ever need. Between you company’s pension, after working there for decades, and social security what else would you need?
As we all know this is no longer the case. While I’m lucky enough to work for a company that still offers a pension as part of it’s benefits packages, many individuals are not. Even those who have long since retired face the prospect of having their benefits cut. Either by the company as it struggles with it’s underfunded plan, or by the government when the company goes bankrupt and sheds their pension obligations.(Even those benefits are in jeopardy, as the entity that takes over the pension obligations is it self suffering from a funding gap.)
Even the companies that still offer pensions plans are not garaunteed to continue offering those benefits. Even then there are employees, and managers who would prefer some form of “supercharged” 401(k). Myself among them. So I ask, what role does your pension plan play in retirement planning? Is it an integral piece of the puzzle, something that you rely on you supplement your retirement income? Or just a nice to have with anything that comes out of it being just a bonus? Please come join me in our forums for a discussion about this.