Eastman Kodak is terminating its 97-year-old pension plan to address $477 million in debt. The move will generate $500 million in cash after selling off assets. Existing employees must choose between annuity or lump sum settlements. Kodak is also considering new pension options for future workers, signaling the decline of traditional pension plans.

Traditional pension plans guarantee fixed income after retirement, with employers contributing to a retirement fund. Defined benefit plans offer security, but only 15% of private-sector employees have them. Companies are shifting towards defined contribution plans like 401ks, where retirement income is based on contributions and investment performance.

Major companies like Pfizer, Merck, and Ford still offer traditional pension plans, while others like JPMorgan Chase and Boeing have closed theirs to new employees. Kodak’s pension plan termination could set a precedent for other companies with costly pension plans, potentially leading to a decrease in traditional pension offerings.

The shift away from traditional pensions could mean higher risk and less guaranteed income for retirement savers. It’s important for employees to understand their pension arrangements and be aware of the retirement options available to them. Kodak’s move to terminate its pension plan may have long-term implications for retirement savings and pension offerings across the corporate world.

Read more at Yahoo Finance: As Kodak Terminates Its Pension Plans, What Top Companies Still Offer This Retirement Perk?