Today I received a letter from the Company that pays me a small retirement. The Company is required to send me an Annual Funding Notice because the retirement plan is insured by the Pension Benefit Guaranty Corporation (PGBC), a federal agency. The letter raises more questions than it answers.
On page 1 it reads "L-3 has no reason to believe that it will believe it will be unable to meet its funding requirements under the plan". Nonetheless, the ratio of assets to liabilities has declined from 93% to 81% over the past three years. No explanation is given for the cause or possible ramifications of the decline. Apparently, the PGBC requires special reporting if the ratio falls below 80% so if the trend continue, L-3 will cross that hurdle soon without raising a sweat.
The specific plan I'm part of is quite small-- only 646 total participants. The assets of our plan are invested 100% in a master pension trust sponsored by L-3 Communications Corporation. The asset allocation of this trust is reported as follows:
cash- .07%
corporate debt instruments- 5.84%
corporate stocks- 57.91%
value of interest in common/collective trusts- 24.60%
mutual funds and similar- 11.57%
other- .02%
No specific investment information is provided and I'm curious. Have they any gold or silver holdings? Commodities? You get the idea. Fortunately, the letter gives a phone number to call if one needs more information. I think I'll give them a ring.
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