Retirement risk

These are testing times for pension plan sponsors. In both Europe and the US, good investments are rare. Plan surpluses are evaporating and many funds will end up with large deficits in the next year or two. Some of these will put the corporations themselves in peril.

Bear Stearns estimates that General Motors’ pension costs could balloon to $2 billion in 2003, from $346 million in 2000. A number of large companies in the US and Europe are in worse shape. Pension burdens will almost certainly