Pension Plans Approaching Danger Point

CSM -- Of the companies in the Standard & Poor's 500 index, 353 offer traditional pension plans, as opposed to voluntary savings plans for employees such as 401(k)s. Of those firms, at least 322 pension plans were underfunded as of mid-June. The total shortfall: $226 billion, despite this year's nascent stock market recovery. (EL - Over 90% don't have the money needed.)

While some experts urge far-reaching changes in the corporate pension system, most expect Congress to focus for now on more temporary measures, such as allowing companies to forecast a higher rate of return on their investments.

EL - One of my jobs has been as sales forecaster. When the numbers don't look good the first thing management wants to do is change the forecast and wait for a more opportune time to tell the stockholders. A higher rate of return doesn't fix the problem, it hides it.