NEWS FLASH: Corporate compensation contracts CAN be broken, but

[nichomachus]

only if it affects working folks and not multi-millionaires.

http://www.boston.com/business/personalfinance/articles/2009/03/25/pension_plan_choices_may_shrink/

Under a law that took effect last year, underfunded pension plans may be forced to limit lump-sum payments and suspend cost-of-living increases for retirees. In addition, some plans could be frozen, preventing current employees from earning credit for additional years on the job.

"Companies are going to have to make drastic decisions about their pension plans," said Peter Austin, executive director of BNY Mellon Pension Services, which advises businesses on retirement plans.

--snip --

The law has already started affecting some local employers. For instance, Boston book publisher Houghton-Mifflin Harcourt Publishing Co., notified its 5,000 employees last week that effective April 1 they no longer have the option of receiving a lump-sum payout at retirement. Now, they can only receive half the money, with the rest paid in traditional monthly payments.

"We had no choice," said Houghton-Mifflin spokesman Josef Blumenfeld. "The law doesn't leave us with any latitude."

Nortel Networks Corp., a telecommunications equipment maker that recently filed for Chapter 11 bankruptcy protection, said it was also required to stop making lump-sum payouts because its pension was underfunded. Nortel, based in Canada, has 30,000 employees, including about 680 in Massachusetts.