federal reserve

6 reasons retirees love it when the Federal Reserve raises interest rates

Retirement »

Help for underfunded pension funds?
No. 3: Underfunded pension funds | Photosebia/Shutterstock.com

Help for underfunded pension funds

Pension funds have been in big trouble. Ninety-three percent of corporate defined benefit pensions were underfunded in 2015, according to Wilshire Consulting.

Pension funds must make sure their assets grow at a pace adequate to cover future liabilities. An earlier Wilshire report noted that low interest rates have made that goal difficult to achieve.

"It is putting pressure on the already-weak pension system," Scott says.

ADVISER SEARCH: Find a financial adviser today.

But Rubin says most retirees don't have pensions and have not been affected.

He also believes that current pension recipients have been unlikely to see their payouts cut. Future retirees may not be as lucky, he says.

Moore agrees. "It is hard to know if clients can depend on (pensions) for their retirement income."

Workers who are worried about their company's pension plan must take action now. "They need to save more or work longer, as well as delay Social Security, to maximize the benefit they will receive," Moore says.


Show Bankrate's community sharing policy
          Connect with us


Claes Bell

Mortgage rates move up for Wednesday

If you're thinking about refinancing, it may be a great time to lock in a rate.  ... Read more


Connect with us