They would also be concerned about the image of the company if liabilities exceed the assets by too much and the company seemed unable to deliver the benefits to its employees.
At CNF, the pension troubles grew out of the freight company's decision, into spin off its unprofitable Consolidated Freightways unit. Even Consolidated's retired president, Thomas A. Bowden retired from his job as accounts manager for a large trucking company with a plan to travel for himself.
For example, firms and institutions that provide high level of training to their employees can offer DB pension plans because such plans encourage loyalty.
It notes that the defunct pension plan has been replaced by a benefits package that will reward pilots who keep working as long as possible. Of course, there is also a risk of losing a lot of money, so to hedge against that, firms should further diversify their equity investments to lower the overall risk variability of their portfolio.
CNF has not filed a response to the retirees' suit, and a spokeswoman said the company could not comment on the dispute. The airline also argues that the government is forcing it to make an inappropriate assumption about interest rates in its calculations, in an effort to grab a larger portion of its stock.
The government's pension insurance has limits to begin with, but those limits are reduced even more for those who retire before age Workers who die young will collect smaller total pensions, reducing the corporate contributions.
US Airways, in court documents, stands by its assumption that pilots will retire at 60 in the future. Current detailed information about pension plans is not routinely disclosed, however.