Contributing to its contractors’ pension plans is costing the Department of Defense dearly. In 2002, the Pentagon paid about $420 billion into these private pension plans. In 2011, it was almost $5 billion.
Fewer Americans have traditional pension plans, and where they still exist, it’s rarer still for a company’s customers to fund them directly. But DOD considers providing these pensions a cost of doing business with its contractors. Most of those pensions are traditional “defined benefit” plans, and when the recession hurt their investment performance, the Pentagon even covered shortfalls.
Check out our infographic for more on Pentagon contractor pensions. See “What Do Others Say?” for more perspective, then add to the discussion below. Is this government expense an acceptable cost of doing business?