>> simply require pension funds to be fully funded << One reason not to do this mentioned in the article is that pension investments can decline in value. The

>> simply require pension funds to be fully funded << One reason not to do this mentioned in the article is that pension investments can decline in value. There should be an expectation that a pretty bad year probably will happen every few decades, maybe a 20 or 30 percent loss, and it would be unreasonable to expect a firm to reimburse its pension fund for losses within a single year when the economy may be very weak. (All of this presumes an annual cycle of reporting and validation of the appropriateness of fund levels and contributions.) The second reason is that when companies used to create or agree with their unions to create defined-benefit pension plans, the benefit formulas at retirement were usually based on years of service, not years of service under the plan, so the plans are born with a large unfunded obligation for the years of service that the current employees have already accumulated. Back when I did pension math, over 40 years ago, the typical (and government approved) way to deal with unfunded liabilities from either of these 2 causes (or any other), was to increase the employer contributions a little bit, so that the unfunded amount of the liability would vanish after 30 years. Because investment results, longevity, retirement rates, etc, would fluctuate, the amount of the extra contribution would be re-figured every year, and a few good years might eliminate the deficit. A shorter period of funding for the deficits, maybe 10 or 15 years, might improve the situation somewhat in some of these cases. But that is not a solution. Note the long discussion above about problems of state and local government plans. These are quite a bit different, because their are no greedy investors calling the shots for state and local governments, and IRS regulations about what plans qualify for tax deductions for the employer don't have traction in the public sector. In the private sector, these stories will become increasingly rare, as workforce unionization is very low, and virtually all the non-union plans have been replaced by 401k plans and defined-contribution pension plans that do not include any concept of an accrued benefit or unfunded liability. That is America's real pension scandal, but it is another story. The real problem is that the situation is too complicated. It is often very difficult to tell whether a company is being streamlined or being looted. Creating a comprehensive set of rules to prevent looting out from under a corporate or even multi-employer pension plan and a watchdog agency that could enforce them wisely for the benefit of workers would be a very ambitious project.