U.S. Companies Need to Get Real about Pensions Too

Corporate America ought to get real about pensions, too. As lawmakers wrestle over how to fix the nation’s ailing retirement plans, AT&T and Verizon took a whopping $17.2 billion of charges related to theirs in the fourth quarter. Return expectations remain too rosy and deficits are rising. The private sector isn’t leading the way on this issue. The two telecom giants are among the leaders in companies saddled with pressured defined benefit plans. Four years of ultra-low interest rates have forced them to use a lower discount rate when calculating the net present value of long-term retirement obligations. That creates ever-bigger holes. The largest 100 U.S. pension funds were short by over $400 billion in 2012, up a fifth from the year before and the largest year-end gap since consulting firm Milliman started keeping track in 2000. It’s tempting to shrug off such red ink as a t...