Hello all,

I was having a discussion today over dinner with some friends and one of the guys gets a pension from a large company (private sector). It is a well known and established company with a long history, etc.

However, one of the other guys in the group was saying that he has heard of some companies getting into financial difficulty and canceling pensions altogether to the point where all employees and retirees who thought they were going to get a pension all of a sudden didn't get them. His quote was something like "the company can just take it away so don't rely on that."

I am fully aware that companies will make changes to pension plans or stop them altogether from a certain date forward, etc. but in my limited experience I have not heard of a situation where a company took X% of employee pay into a pension and then one day decided to take all that money back and use it for the company's benefit. I am also aware that in theory the pension could be invested improperly and lost (e.g. madoff style or enron style of investing a lot of it into enron stock) but IMO that's still different than the company all of a sudden saying "sorry guys but no more pension checks will be written and you're all SOL."

I typically advise my brother (who has a pension) to calculate his expected pension payments for retirement savings (he also works for a large private company). I also have some friends who took lower paying jobs in exchange for pension (e.g. job A pays $100k with no pension but job B pays $85k with 20k put into a pension/year), etc.

So what's the story here?


Thanks





I didn't find the right solution from the internet.
References:
https://www.bogleheads.org/forum/viewtopic.php?t=155369

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