Pensions still fading away

The accelerating trend for corporations to move away from company provided pensions and retirement benefits has brought about a lot of anxiety about whether benefits will be available when they will be needed. Many companies have already eliminated traditional retirement plans and have been steadily moving to pass the cost of medical benefits on to employees or eliminate plans altogether.

Those already retired face a constant fear of losing benefits they have begun to receive or being overloaded with rising costs for benefits they expected to last a lifetime. Most retirees now absorb annual cost increases passed on to them by companies not willing to carry the expense of keeping up with rising costs.

A March 8, 2007, article from the News and Observer gives insight into yet another example of this scenario and describes what IBM is doing to help prepare employees for a freeze of its pension plan next year by offering employees an opportunity to learn more about managing their own retirement...

News and Observer
March 8, 2007
Anne Krishnan, Staff Writer

IBM eases shift away from pensions
Employees to get free financial counseling

IBM wants workers to be prepared when it freezes its pension fund next year and switches workers into investments they will have to manage themselves.

So this month, IBM will introduce a financial education and coaching program for its 127,000 U.S. employees.

The program, which IBM expects will cost $50 million over five years, will provide seminars, online planning and one-on-one financial help, all free for employees.

"We're going to give them the tools and the guidance and the knowledge to make decisions on their own," said Randy MacDonald, IBM's senior vice president of human resources. "We don't want people to make decisions in a vacuum."

The program could soothe employees struck by pension cuts over the past several years. It could polish IBM's image, as well. Read more...