BJ pension underfunded; should we worry?

BJ Alums blog got this email from Guild retiree Charlene Nevada:

Charlene's email:

John,

Can you (or someone) enlighten us about the recent pension letter from Aaron Burr. I could swear we got a similar letter last year, and this letter references 2011? I'm confused, but the 75 percent investment figure for pensions looks not good.

char

-----------------------------------------

Lisa in the BJ's Human Resources Department says the letter is just "a legal requirement." Later, when I talked to Aaron Burr, head of BJ's Human Resources, he said in his Oklahoma accent (because he's from there) that the underfunding notice has been required since 2008. I remember getting the same notice last year.

The BJ pumps assets into its pension fund through Wells Fargo, successor to the earlier Northern Trust Bank. The problem with most pension funds in America is that companies use their own stock to fund the pensions. When the stock prices dive, as newspaper stocks have, the assets shrink accordingly. The BJ has 100% of its pension funding from common/collective trusts.

According to a January story by Reuthers news agency, 97% of the 341 companies in the S & P 500 index with defined benefit pension plans are underfunded.

The U.S. government recommends at least 80% funding of the pension plans. The BJ's funding dropped below 80% to 73.95% in 2011.

There are 326 people receiving BJ pensions, another 194 who are entitled to pensions in the future and still another 174 who are building up their pension credits while working at the BJ.

In 2011 the BJ pension fund had $40.9 million in assets and $55.3 million in liabilities, which includes future pensioners.

If you want more answers, you may phone Aaron Burr at (330) 996-3184.