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Pension contributions may have to rise this year

February 17, 2009 by  

Expert says financial meltdown will lead to higher pension contributions in 2009As the stock market collapse eroded employee pension funds, a consultancy is predicting that the level of contributions will double in 2009.

According to the Milliman 100 Pension Funding Index, net losses of pension funds were $23 billion in January. As of the end of that month, the total asset value for these pensions stood at $923 billion.

John Ehrhardt, co-author of the index, says, "Pensions have lost 30 percent in funding status since the beginning of 2008, and employers may have to double their contributions in 2009."

"After such a brutal year, it is easy to forget that these pensions were 104.9 percent funded to begin 2008," he adds.
Founded in Seattle in 1947, Milliman is one of the largest independent actuarial and consulting firms in the world.

The Milliman 100 Pension Funding Index, which consists of 100 biggest defined benefit pension plans in the U.S., projects the funded status for pension plans, reflecting the impact of market returns and interest-rate changes and utilizing reported asset values, liabilities, and asset allocations of the companies’ pension plans.

A recent survey from the American Institute of Certified Public Accountants indicated that 35 percent of their clients who are approaching retirement age are postponing it due to recent wealth erosion.
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  • Bob Livingston

    Pensions are getting a lot of attention because politicians want to force all pension funds into Social Security under the pretense of helping people conserve their assets and investment.

    Pension funds have been severely eroded in the market meltdown. People who thought they were ready to retire will not have the funds.

    The big thing is that pension funds seldom outrun depreciating currency. This fact is never mentioned by the fat cats who plan pension funds and the politicians who want to transfer all pensions to Social Security. The only politician I ever remember even mentioning depreciating currency is Ron Paul. It is just something you don’t talk about if you want to stay on the payroll.

  • http://www.solutionsiec.com jasony

    Bob,

    Why would anyone want to put more money into a failing social security fund anyway? How do they sell that as a safer way of investing money when we already put money into a system that declines and has well before the “economic meltdown”?

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