Friday, May 01, 2009
ING provides a sample "Annual Funding Notice" for its pension plan; Chrysler bankruptcy supposed to leave pensions intact
ING has sent to retirees a copy of its “Annual Funding Notice” and the document illustrates (for retirees of most large corporations that have offered defined benefit plans) how pensions work, and how retiree safeguards are supposed to work.
There is a table that gives a “Valuation Date” (January 1, 2008) and a “funding target attainment percentage,” which as 88.5%. The higher the number, the better, the document says.
However, asset values on the chart are “actuarial values” (as computed by textbook mathematical formulas), not market values, which can be very volatile.
The document does give a “Summary of Rules Governing Termination of a Single-Employer Plan” and a section called “Benefit Payments Guaranteed by the PBGC”. The maximum guaranteed benefit would be $51750 a year, and can be less for a surviving spouse or for a retiree under 65.
The paragraphs on the rules for termination are provided for information only; they fact that they were provided has nothing to do with the health of this particular plan.
A quick note about the Chrysler "bankruptcy" and pensions:
I do understand (from network reports), by the way, that the Chrysler Chapter 11 Bankruptcy plan is supposed to protect the pensions of retirees. However, it appears that they will lose some health benefits. The Wall Street Journal story (“Chrysler Pushed Into Fiat's Arms: Italian Car Maker, UAW Main Owners; Obama Pledges Brief Stay in Bankruptcy; Creditors Take Hit” by Neil King, Jr. and Jeffrey McCracken is here.