IBM, the corporation that jump-started the trend of companies dropping defined pensions for workers in favor of cheaper, tax-deferred retirement accounts, has a new scheme for retirees: retirement accounts that may not actually be secured.
If IBM were to become insolvent, Hulme said, those accounts would be considered general liabilities that aren't secured by anything. So employees would simply become creditors with no guarantee they'd be able to recover their funds.
Before, the funds were held and administrated by a third party that invested in a variety of companies, government bonds, and other instruments. But now your retirement is locked into the success or failure of just one company. What could possibly go wrong?
