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Retirees' medical benefits come up short

June 6, 2006 at 7:04 PM   |   Comments

NEW YORK, June 6 (UPI) -- Many major U.S. companies still have poor retiree benefits, despite rising quality in pension plans, The Wall Street Journal reported.

Medical cost funding, in particular, is continuing to come up short, the newspaper said. In the beginning of 2006, the post-retirement plans and healthcare obligations of the companies in the Standard & Poor's 500-stock index were severely underfunded.

S&P and many other pension trackers are predicting that rising interest rates will quell much of the pension-plan shortfall, but funds for "other post-employment benefits" (OPEB) will be much less than projected outlays, the Journal said.

"OPEB is in very poor shape," says Howard Silverblatt, S&P's senior index analyst in New York and author of the research report. "The pension situation is much more manageable because there are more assets set aside to cover those liabilities."

© 2006 United Press International, Inc. All Rights Reserved. Any reproduction, republication, redistribution and/or modification of any UPI content is expressly prohibited without UPI's prior written consent.
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