If you plan on funding your retirement with your company's pension plan, you need to think again.

Last week the Senate passed a pension bill meant to stem the tide of failed company plans that have been foisted on taxpayers in recent years by distressed companies such as United Airlines. The goal: force companies to keep enough cash on hand to fully fund the retirement promises they've made to their employees.

In reality, though, this well-intentioned bill is just a sign of the demise of the traditional pension, which has been on the wane since the 1980s and will likely be entirely replaced by the 401(k) and other do-it-yourself retirement plans.

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While regulators focus on the egregious cases of bankrupt companies, more and more healthy U.S. companies are freezing their pension plans. That means they either shut new employees out, freeze the accrual of benefits for current employees or both.

Just this year alone, steady-Eddie companies such as Coca-Cola (KO), IBM (IBM), Nissan and Alcoa (AA) have totally or partially frozen their plans. Why? To stay competitive.

If you work at a large corporation with a pension plan, you should assume a freeze is going to happen to you too.

Depending on where you are in your career, a pension freeze can severely damage your retirement picture or leave you virtually unscathed, says Alicia Munnell, director of the Center for Retirement Research at Boston College.

That's because workers close to retirement have already accrued most of their maximum pension. Younger workers can take advantage of a 401(k) with a generous employer match, which is what employers typically replace their pensions with.

But for workers in the middle with, say, 15 years to retirement, the effects can be devastating since they have only accrued a modest pension and a 401(k) depends on the long-term appreciation of stock mutual funds and other investments to grow.

What can you do? Start planning for a freeze right now and don't expect your company to give much advance warning, says Munnell. Calculate what your finances would look like if your pension were frozen this year, in five years. If the result would be devastating, you may want to talk to a retirement planner and start socking away more money, even if you must put it in a taxable account.

If your pension is frozen, immediately deposit the maximum into your 401(k) to take advantage of the matching contribution.

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