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How’s Business? No pension?

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The PBGC is already facing a $9 billion shortfall, without counting the now $8.4 billion in unfunded obligations created by United, which has only paid about $50 million to the PBGC, is a defined loss at any level.What this means to the U.S. worker is that retirement is far from being what it was. Twenty years ago, about 40 percent of American workers were covered by traditional defined benefit pension plans. That number today has decreased to 20 percent. But even this 20 percent may be in jeopardy and may not be able to count on what they've been promised and worked for. Also, 75 percent of corporate plans are under-funded. So let's say you were expecting to retire at approximately $144,000 a year with your pension. If United defaults (as expected), the retiree would only receive $28,000 from the PBGC. If the retiree waits until 65 to start collecting, the eligibility amount would increase to $44,500 annually, but it's still a far cry from what was expected and definitely a sharp blow to retirement anticipation plans.So how's business with regard to the safety of retirement pension plans? In the end, be prudent with your money, look for different investment areas to capitalize on before retirement and as always, budget and save accordingly.Joseph J. Palumbo III is a managing partner for the Palco Group. The Palco Group deals in asset management, real estate, sales training and business consultation. Palumbo can be reached at 718-461-8317, or at palcogroup@aol.com.

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