Pension Plan Of Bethlehem Steel
FIN 521 Corporate Finance, Section A
Case 2. Pension Plan of Bethlehem Steel Zhineng (Jason) Luo zluo7@illinois.edu
1. The stakeholders in the defined-benefit pension plans include: (1) Plan sponsor, often is employer, who is responsible for making fixed monthly payments to plan participants from retirement until death. (2) Plan participants, often are current or former employees, who are eligible for benefits. (3) Pension fund or trust, an entity that is separate from the employer and which hold and invest funds to pay benefits to participants.
2. Private companies and non-governmental institutions should offer DB pension plans, because they should have employer-sponsored pensions to provide incomes to retired workers. Employer-sponsored pensions also play important roles in supplementing government pensions, which are offered by government-owed companies and governmental institutions.
3. Firms should appoint fiduciaries to control and manage pension plan operations, administration and assets. A desirable portfolio allocation should diversify plan assets to minimize risk of large losses from any one investment, …show more content…
Yes, we should. PBGC insurance would further protect DB plan participants when the sponsor execute termination of an overfunded or underfunded insured plan by becoming the trustee of the plan to pay the participants’ benefits when they retired. Yes, because PBGC did not use federal tax dollars for operations, they would charge sponsors specific amount per participant insurance premium. It would be better that the insurance is provided by the federal government. Firstly, it should be Non-Profit Organization. Secondly, it is government’s duty to protect participants’ benefit. Thirdly, the government would have the financial back-up to operate this organization if there was some kind of sudden
Case 2. Pension Plan of Bethlehem Steel Zhineng (Jason) Luo zluo7@illinois.edu
1. The stakeholders in the defined-benefit pension plans include: (1) Plan sponsor, often is employer, who is responsible for making fixed monthly payments to plan participants from retirement until death. (2) Plan participants, often are current or former employees, who are eligible for benefits. (3) Pension fund or trust, an entity that is separate from the employer and which hold and invest funds to pay benefits to participants.
2. Private companies and non-governmental institutions should offer DB pension plans, because they should have employer-sponsored pensions to provide incomes to retired workers. Employer-sponsored pensions also play important roles in supplementing government pensions, which are offered by government-owed companies and governmental institutions.
3. Firms should appoint fiduciaries to control and manage pension plan operations, administration and assets. A desirable portfolio allocation should diversify plan assets to minimize risk of large losses from any one investment, …show more content…
Yes, we should. PBGC insurance would further protect DB plan participants when the sponsor execute termination of an overfunded or underfunded insured plan by becoming the trustee of the plan to pay the participants’ benefits when they retired. Yes, because PBGC did not use federal tax dollars for operations, they would charge sponsors specific amount per participant insurance premium. It would be better that the insurance is provided by the federal government. Firstly, it should be Non-Profit Organization. Secondly, it is government’s duty to protect participants’ benefit. Thirdly, the government would have the financial back-up to operate this organization if there was some kind of sudden