Knowledge@wharton

IBM. Verizon. Sears. Hewlett-Packard. Motorola. The list of corporations that have put a halt to guaranteed pension plans comes as a jolt to Baby Boom employees entering what they thought would be their peak pension-building years. At the same time new accounting rules and Congressional legislation are being drafted to close the U.S. pension-funding gap now estimated at $450 billion. While some proposals under discussion could make it easier for companies to discontinue defined-benefit plans others would create incentives to support defined-contribution programs such as 401(k) plans according to Wharton faculty and pension experts. Amid all this flux they add one thing seems certain: Pension plans have become risky business. See acast.com/privacy for privacy and opt-out information.