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Is your pension safe? This is the question that is being raised by the Organization for Economic Cooperation and Development (OECD.)The financial crisis of the past two years is wrecking havoc on pension plans throughout many countries of the world and could set off a new time bomb, this time a social crisis.

We should note that there are two kinds of popular pension plans. First we have the "defined benefit" (DB) plan where the benefit on retirement is determined by a set formula, rather than depending on investment returns. The second type is the "defined contribution" plan. Here contributions are paid into an individual account by each member. This money is then invested in stocks, bonds, etc. Monies can be contributed by both employers and employees. This type of plan is more vulnerable because it is subject the the ups and downs of the market.

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Is your pension plan safe? originally appeared on BloggingStocks on Tue, 23 Jun 2009 15:10:00 EST. Please see our terms for use of feeds.

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