Be Pension Wise

Their gains once padded corporate profits, but now pension-funds' costs haunt the bottom line

If you're flinching at the recent losses in your brokerage and 401(k) accounts, imagine how the managers of America's huge pension funds feel. The top 100 U.S. pension funds boasted a gargantuan $3.5 trillion in combined assets last September. Now, despite having fortified their reserves with huge stock-market gains in recent years, public and private pension funds are facing steep declines. Northrop Grumman, a giant in the aerospace and defense industry, called attention to this little-known fact in December. It warned that a drop in income from its pension investments could knock $50 million in pre-tax dollars off corporate profits this...

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