An audit by the Labor Department?s inspector general revealed underpayments totaling 17 million dollars per year by 13 out of 60 companies studied. The underpayments seem to occur when employers incorrectly calculate benefits for departing workers. Cash-balance plans distribute retirement earnings evenly throughout an employee?s career, instead of figuring benefits using length of service and final pay, as with traditional plans.
See "Wrong Payouts are Uncovered in Pension Plan", Steven Greenhouse, The New York Times, May 7, 2002