Pepsico vs. Coca-Cola: Pension Plan Analysis

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Which pension plan is more secure Pepsico or Coca-Cola? Coca-Cola's pension Coca-Cola was one of the earliest companies to adopt a cash-balance plan for their employees ever since Congress passed the Pension Protection Act in 2006. The cash-balance plan states that employees will receive annual cash weighted credits that are equal to a percentage of pay and that these credits will start at 3% of pay and increase with age. The Coca-Cola's cash-balance plan is also accredited with interest which makes the pay more and raises its attractiveness. This cash-balance plan is far more seductive and lucrative to employees than traditional plans since their benefits accrue faster. In traditional plans, such as those in Pepsi, workers have to work many years until they actually see benefits pay off. Coca-Cola also allowed its employees to set up new cash balance plans without fear of litigation. This is different to some other companies who were actually sued in their implementation of cash-balance plans since they had imposed them in such a way that they had inserted age discrimination. In 2008, Coca-Cola accorded $149 million in terms of pension plans and $23 million was discretionary. Their cash benefits for medical reasons in connection with pension were approximated to be $100 million in 2009 although their pension rate in that year plunged too somewhat due to the recession. Their medical plans are funded on a pay-as-you-go basis. Pepsi's Pension PepsiCo's pension plan

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