The report adds that defined-benefit plans, because they're professionally managed, achieve superior investment performance when stacked up against individual investors in 401(k) plans who are left on their own to decide how much to save, how to invest their funds and how to modify investments over time.
For the companies maintaining traditional plans, keeping them properly and legally funded is a challenge.
According to global consulting firm Mercer, the funded status of pension plans sponsored by S&P 1500 companies was 79% at the end of May, compared with 84% two months earlier. That equals an increase in aggregate pension deficits of $84 billion -- from $252 billion at the end of March to $336 billion at the end of May.
Any drop in funded status means that companies, to comply with federal standards, are on the hook for making up the difference and ensuring that retirees don't miss a payment.
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