Bernie Madoff may be miles away from Syracuse but the impact of his alleged investment scheme appears to be having a major impact on some local pensions. Members of a local carpenters union are trying to figure out how much money they lost. On Saturday, members of a local roofers union were told their pension plan lost more than 90% of its value. It raises a very important question: What should anyone with a pension be doing right now?
"Well I think they can push their trustees," says Bryan Place, of Place Financial Advisors. "If it's a local pension, if it's a larger company, they can ask the trustees maybe the HR department, how is the money invested."
Place says it's important people know the difference between a pension and a 401(k). People with 401(k) decide where their investments go. Folks with pensions don't make that selection, instead a committee chooses. That's why Place says it's important that people with pensions ask not only where the money is being invested but also find out if any significant portion is with one money manager. And he says people with pensions should not have all their eggs in one basket.
"You need to have money on the side, you need to create your own investment strategy over and above social security, over and above the pension because life changes," Place says.
Place says, with the stock market the way it is right now, it's actually a good time to invest.
"Eventually the market will turn and the ability to accumulate wealth is never better than when the market is weak," Place says.
Place has some more advice, this time for young people with 401(k)s. He says right now they should be contributing as much as they can.
