Xerox and Kodak announced changes in their retirement plans. There's no surprise here that both corporations are freezing any already non-frozen pension plans. Xerox and Kodak are following suit with other corporations in their industries.

Truth be told, Xerox and Kodak are late to the game in this phase out. Many other organizations, including the federal government and Bank of America, started decreasing their pension plans as early as the 1980s due to high costs. Today, according to the Federal Reserve Board, nearly half of the Fortune 1000 companies that have pensions, have frozen at least one of them.

Today, most retirement plans are comprised of 401ks. The author of the aforementioned article states that most Americans' retirement plans are "not much more than a hope and a prayer," but I beg to differ. Rather, with thoughtful planning your retirement plan can be more than a hope and a prayer.

The takeaway here is that the responsibility has now been placed on the employee to actively choose how much, and what, to invest in their retirement plan, rather than simply relying on a corporate pension plan. My first tip: DO NOT CALL HR and ask how to invest your retirement funds. Human Resource professionals, while very knowledgeable, are not financial professionals, and are not trained on how to evaluate investments or to give investment advice. You should, instead, speak with the management company that structures your 401k, or, better yet, call a financial advisor. My second tip: Do not simply pick the target date fund that "looks the best," because, often there are better choices inside the plan.

Do not be discouraged by this news of more pension plan freezes. While it greatly impacts those who dedicated their lives to serve Xerox and Kodak, if you are entering the workforce or still working, be proactive and make the choice to take advantage of your retirement planning options. My final tip: contribute to your 401k, receive the match offered, and, if you can, max out your contribution! If you do, then you will have MORE than a hope and a prayer; you will have a retirement.

Caroline Hill, Financial Advisor


(This article contains the current opinions of the author but not necessarily those of Brighton Securities Corp. The author's opinions are subject to change without notice. This blog post is for informational purposes only. Forecasts, estimates, and certain information contained herein should not be considered as investment advice or a recommendation of any particular security, strategy or investment product. References to specific securities and their issuers are for illustrative purposes only and are not intended and should not be interpreted as recommendations to purchase or sell such securities).