Defined benefit pension plans have long been favored for retirement because they promise a guaranteed level of income and don’t require individuals to manage assets. It’s a painless way for retirees to enjoy their golden years. That is, unless the plan goes bust.
Unfortunately, that’s the condition a number of pension plans are close to being in, particularly so-called “multi-employer” defined benefit plans. These plans typically cover unionized workers who move from job to job throughout their careers. It is no exaggeration to say that these plans face a crisis. There is currently a shortfall of more than $124 billion in these plans. Roughly 1,141 of these plans, covering 1.3 million workers, face more than $36 billion in shortfalls and are likely to start going bankrupt in as little as five years... Read more...
