Only 20 percent have the traditional, defined-benefit plans - the kind that used to be given along with a gold watch when workers turned 65. That's down 50 percent from just 20 years ago.
And of those remaining plans, more than 75 percent are underfunded. Some experts say that time and a healthy economy will remedy most of that problem. They argue that only a few companies are facing serious pension deficits, while the rest are facing only small shortfalls. As the economy gains strength, these advocates contend, companies will be able to add more to their pension plans, which, as market also revs up, will be able to earn more income with their current assets.
But others are less sanguine. They argue that many more companies are facing dire shortfalls than it appears on paper. That's because accounting changes allowed by Congress last year have made it possible for companies to significantly overstate the health of their pension plans, they say. For instance, prior to its default in 2002, Bethlehem Steel stated that their pension plan was 84 percent funded. Once the PBGC took it over, it turned out to be only 45 percent funded, according to George Benston, a professor of finance at Emory University's Goizueta Business School in Atlanta.
"It's not mystery when you read the rules and the law. There are all kinds of loopholes that make it possible for companies to be underfunded and not penalized for it," he says. "If you're in a company with a defined-benefit plan, you better hope your company is around when you retire."
Some advocates for the elderly contend that Congress has bowed to corporate pressure, making it possible for companies to renege on the obligations they've made. They point to the United default as the latest in a trend that started in the mid-1990s as companies looked for ways to increase bottom lines.
"This is an assault on the retirees all over America, and we've got to bring it to a stop somehow, someway," says Jim Norby, president of the National Legislative Retiree Network in Washington, which represents more than 2 million retirees nationwide.