The Health of a Pension Plan

The front page of today’s edition of the Wall Street Journal has this article by Ellen Schultz and Theo Francis: “Most Workers Are in Dark on Health of Their Pensions: US Airways Killed a Plan That Pilots Had No Inkling Was in Financial Danger.” The article reports that “[o]ne source of pension information, company filings to the Securities and Exchange Commission, is of little use to employees” because most big companies have multiple pension plans which are lumped together in their filings. The article reports that without adequate information, employees and retirees face a risk that the employer “can mask the deteriorating health” of the plan and “take steps to cut benefits or kill the plan” or on the other hand, exaggerate the ill health of the plan “to justify reductions in retirement benefits.” The article discusses in detail how the latter is what happened in the US Airways case.