As employers continue to cut future pension benefits for their employees, in an Oct. 20 article, the Washington Post asked Professor Norman P. Stein what options, if any, employees have to protect retirement funds. 

A cash-balance plan, where an employer sets credit aside and pays a promised conservative interest rate, is one low-risk option an employee can turn to after his or her employer freezes a pension plan, Stein said.  However, with these plans employers are not required to pay above the agreed upon interest, even if the market yields a higher return, he added.  On the other hand, upon retirement, employees have the option to take a cash-balance plan as a lump-sum payment or reinvest it, Stein said.  Therefore, employees are advised to consult a financial planner on how best to convert a cash-balance plan.

Norman Stein is a nationally recognized authority on pension law, employee benefits and tax law.