|
|
||
Date published: 12/29/2002
THE DALLAS MORNING NEWS Much attention has been paid to how workers should monitor their retirement savings accounts, such as 401(k)s. But there's another component of retirement that you need to watch--your company's pension plan. Pension plans are a hot topic these days. Many companies have announced shortfalls in their plans, which have been battered by the falling stock market. One example is SBC Communications Inc., which disclosed in November that covering losses in its pension fund will cost the company between $1 billion and $2 billion in 2003, cutting into its profits. In a traditional pension plan, employers kick in money to be invested by professional managers. Income from those investments funds retirees' checks. In general, as long as your company is financially healthy, it can make up for investment shortfalls. But when it is in trouble, your pension could be threatened. A federal agency insures most pension payments, but that safety net stretches only so far. So it's a good idea to find out the financial health of your pension plan. The good news is, unless you've been told otherwise, your plan is probably OK. But it never hurts to ask. When studying your pension plan, you'll need some key documents. Your company is required to provide them if you ask, but you can also get them on the Web. Internal Revenue Service Form 5500, the Annual Return/Report of Employee Benefit Plan, spells out key financial information about a pension plan. All pension plans covered by the federal Employee Retirement Income Security Act, or ERISA, must file a Form 5500 each year. You can get a copy by asking your company. Or you can get one at www.freeerisa.com. As the name implies, it's free, but you have to sign up and give your e-mail address. The rub is that the information may be outdated. Companies have to file the form within seven months of the end of their fiscal year. "In the best case, the information you receive will be six months to 18 months old," said Richard Hartzell, vice president and an attorney specializing in employee benefit plans at Banc One Investment Advisors in Columbus, Ohio. Don't let the lag deter you. The 5500 is still an informative document. The bottom line is: Does your pension plan have enough assets to cover future payouts to retirees?
1. Be respectful. No personal attacks.
|
|
|||||||||||||
