It is amazing and criminal to me that pensions represent such an uncertain benefit in the USA. The pension fund should be something totally separate from the company’s balance sheet. And it should represent a quantifiable amount to the person involved.
In Holland this is the case. Our pension fund is a separate entity. The company and employee together save for the employee’s pension. In our case you build up 2.25% of your annual pay for that year’s service. So after 30 years of service you have build up 67.5% of your average pay over your career. The pension that you have built up to any given point (say today) is completely separate from the company. If the company goes down the toilet your pension rights remain assured within this separate company. The pension fund does not become part of the bankruptcy. Of course your rights are frozen from that point onward. From that same point your final pension payments depend on the results of the pension fund, indexation can or can not take place. To me this seems so normal. How come Americans accept this ridiculous situation? How on earth can you make any sort of financial planning if a basic element of your planning is built on quicksand?
Of course a company can get into trouble and things might have to change. But the way things are run in the USA is beyond cruel.
I will leave all the jerks who are saying I told you so, or are jealous of not having made it into the majors for what they are. But the people at United, Northwest, Delta, and US airways have my sympathy, they are being robbed (and that is putting it mildly). I guess as long as the top 5% of the population controls 95% of the wealth things are unlikely to change.
Wishing you the best.
Regards, O.