Chapter Seven Refresh

Welcome to the “End of Chapter Resources Page” for Chapter Seven of The Golden Albatross book. Chapter Seven is the first chapter in the second part of the book. I designed the second part of the book to be more numbers and fact-based, rather than emotionally driven like the first part of the book. It’s all about how to determine your pension’s worth objectively. Or, at least as objective as the circumstances allow. The first issue I addressed with that mindset was Pension Safety.

Basic Level Stuff

In Chapter Seven, I broke the Pension Safety topic down based on the two main types of pensions, public (government-backed) and private (corporate-backed). Throughout the chapter, I referred to numerous research tools. These tools can be used to determine the funding status of a pension, depending on whether it’s public or private. I’ve linked them below.

I also linked to my article which covers the Pension Benefit Guarantee Corporation (PBGC) in more detail than I could in Chapter Seven. Remember, the PBGC is the U.S. government backed insurance scheme that insures both Single-Employer Pensions (SEPs) and Multi-Employer Pensions (MEPs). The SEP fund is almost fully funded. The MEP fund is in danger of running out of money in 2024. So, there is an extremely large difference in how useful the PBGC is to a pensioner in a SEP vs. an MEP.

Basic Pension Safety Resources

• • Investopedia article: Turns out someone at Investopedia wrote a similar post to mine a few years ago. It’s dense but worth the read.
    • Is Your Defined-Benefit Pension Plan Safe?
  • Investopedia article: If you walked away from this chapter feeling queasy, double-check with this article. If multiple signs listed in the article are swirling around the office, start your in-depth research now on your specific pension plan.
    • 7 Signs Your Pension Fund Is In Trouble
  • Boston College’s Center For Retirement Research is a great resource for retirement research in general and for public pensions specifically.
    • Center for Retirement Research
  • A one-stop-shop for U.S. public pensions including information on funding levels for public pension plans from the state down to local level.
    • Public Plans Database
  • This article is a must-read if you work for an S&P 500 company and are owed a pension.
    • S&P 500 Indices’ 2017 paper
  • What is the PBGC?  What happens when it intervenes in a pension fund?
    • The Pension Series (Part 15): The Pension Benefit Guaranty Corporation (PBGC)

Graduate Level Stuff

Finally, in the Graduate Level section below, I linked to two articles on how stock market volatility impacts pension fund safety.  I wrote one of them, but it was after the book format went final. So, you won’t see it referenced in the book. That said, it’s a good example of how I intend to update these pages every so often with newer and more relevant material.

The final link is to an article of mine that covers the concept of Pension Risk Transfer in more detail than I could in one solitary text box in the book. It specifically examines whether or not the transfer of a pension fund from a corporation to an insurance company is good or bad for the pensioner.  No spoilers here, you’ll have to read the article.

Graduate Level Pension Safety Resources

• • Investopedia article: Graduate level article on how to analyze the risk associated with your pension plan’s investment portfolio.
    • The Investing Risk of Underfunded Pension Plans
  • My article on how market volatility impacts pension plan funding levels, and what type of pension plans are at risk from volatility.
    • The Pension Series (Part 20): Pensions, Volatility, and Risk
  • My article on who wins and who loses when a pension fund transfers its obligations to an insurance company.
    • The Pension Series (Part 14): Pension Risk Transfer