It’s not just state and local governments that are now grappling with huge pension problems.
Big companies like Lockheed Martin (LMT), ExxonMobil (XOM), General Motors (GM), Alcoa (AA
ALCOA INC.), Raytheon (RTN), Dupont (DD), AT&T (T), Caterpillar (CAT) and Chevron (CVX) are battling pension problems, too. And the Federal Reserve’s low rate policies are to blame, the country’s top consultancies warn.
erest rate policy is taking big bites not just out of bank deposit accounts and seniors’ wallets, but also big chunks out of the country’s 100 biggest corporate pension plans, creating record deficits in these pensions, says consultancy Milliman.
That means companies will experience an increase in pension problems, because the Federal Reserve has already indicated its intent to keep rates low until the unemployment rate hits 6.5%, Milliman notes.
Historically low rates have deepened the pension funding deficit in record amounts for these plans in 2012, Milliman says, with the top 100 US-based plans on average funded just 76.4% as of the end of last year. Usually plans need to be 80% funded to be considered healthy.
Read More at Fox Business . By Elizabeth MacDonald.