How Sound and Secure is Your Retirement or Pension Plan?

October 27th, 2008 by Sexy Mom · Viewed 767 times · 3 Comments

Stakes in the company’s Retirement/Pension Plan

In my former office, staff and pensioners/retirees alike, have stakes in the company’s Retirement Plan. Employees contribute a certain percentage to the Plan aside of course from the company share. When one retires, one has the option of either receiving a lifetime pension or withdrawing up to 50% of the retirement benefits and take the remaining as a pension. It used to be that a retiree has the option of withdrawing 100% of the benefits, but statistics proved that after a few years, a good number of retirees end up spending all of the retirement money or placing them in wrong investments, leaving the retiree moneyless in his or her old age.

Those who resign from the company before qualifying for retirement, also have withdrawal benefits—which they receive in full. Retirees have the added benefit of enjoying a lifetime comprehensive medical insurance together with spouse, and children up to a certain age.

Just timely to raise the question on the Plan’s soundness and integrity

It is also just timely for staff and pensioners/retirees to raise the question of the Plan’s soundness, taking into consideration the global financial crisis, in which stocks continue to tumble down. It is known for a fact that the assets of the Plan are being invested.

It took a while for the company, through its Investment Committee, to respond—because of the rapidly evolving situation, they wanted to provide a balanced and up to date picture.

We are just too glad to receive assurance of the Plan’s soundness and integrity, and confirmation that:

the Plan is a defined benefit which is not linked to the performance of its assets.

the Plan’s assets are diversified and have performed remarkably well in recent years—with assets outperforming benchmark including major indices, with the close supervision of the Investment Committee.

the Pension Committee is confident that in the long run, the Plan, as in the past will meet if not exceed the investment benchmarks, although 2008 returns are not expected to be as high.

The Plan will continue to be managed in a prudent manner in accordance with accepted pension governance practices incorporating an appropriate level of risk through these volatile times.

The Pension Committee is confident that they will be able to weather this period as they had in the past, being long term investors of a well-diversified portfolio.

That’s it. God forbid, if I lose my pension…it will be more difficult times ahead.

HOW ABOUT YOU? How secure and sound is your Retirement or Pension Plan? It pays to know…

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Tags: Information · The US Financial Crisis

3 responses so far ↓

emily // Oct 28, 2008 at 12:54 am

Tita D,
Have you recently reviewed how diversified your plan’s allocation of investment are? Now is probably not the best time to look at the numbers bec. I guarantee, no matter how well diversified it is, everybody took a hit..but it is also a time to plan ahead and look at the overall picture of things. this crisis is not going away soon unlike the previous fall of the market..Two years ago..one of my co-worker who is in his 50’s and a savy investor I think, told me to slowly move some of my money in money market fund instead of leaving it in the large cap mutual funds bec. the bubble is going to burst soon. I told him that I can take the hit bec. I have 30 more years before retirement. I did, however followed his advice with our company’s pension plan ( years ago, we had option to leave it with the comp. planner i.e. Fidelity or we can allocate it ourselves) I still lost 15% bec. you can’t really sell everything and just put your money in MMkt..which is still good compared to losing 36% which happened to my 401k..I still contribute the max amount in my 401k bec. as I see it..I am buying cheaper stocks kahit masakit tignan sa mata that I lost that much money already. Just sharing my views..Thanks and God bless.
Charles Ravndal // Oct 28, 2008 at 5:31 pm

I havent thought about it yet since in Norway once you are paying taxes you have the right to get these benefits and such later in life. That’s one of the great things found in a welfare state.
Snow // Oct 29, 2008 at 10:59 am

i am actually thinking of getting a retirement plan as early as now. however, i’m still apprehensive about it. this is an interesting article…. i’ve learned a lot.

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