Adjustable pension plan design begins to gain converts (this plan screwed my mom) [View all]

[Omaha Steve]

http://www.pionline.com/article/20130429/PRINTSUB/304299981/adjustable-pension-plan-design-begins-to-gain-convertsadjustable-pension-plan-design-begins-to-gain-converts

Benefits can shrink or grow depending on performance
By Kevin Olsen | April 29, 2013

A new pension plan design that allows employers to drastically reduce their risk while still providing lifetime income to participants is gaining support as an alternative to moving employees into a defined contribution plans.

The adjustable pension plan was conceived by Richard Hudson, principal consulting actuary at Cheiron Inc., New York. Its key difference from a traditional DB plan is that the benefit received each year is adjusted from an original multiplier based on the previous year's investment performance.

The plan design shares the investment risk between employees and employers while providing more retirement income security than a typical defined contribution plan.

Earlier this month, Consumers Union, Yonkers, N.Y., reached a collective bargaining agreement with the Newspaper Guild of New York to create an adjustable pension plan that will replace the standard DB plan for guild members. The existing plan had about $42 million in assets as of Dec. 31, 2011, according to the company's most recent Form 5500 filing. That plan will be frozen on May 31, and contributions to the adjustable plan will start June 1.

FULL story at link.

My mom worked for a non-profit hospital for 30 years. For that she averaged about $150 a month. Awhile back the stock mark was doing so well she got a one time middle of the year bonus. The next year her monthly check was cut in half thanks to crooks on Wall St.