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What bear market? A recent study by actuarial firm Milliman USA shows that the 20 largest companies' defined-benefit pension plans added almost $7 billion in corporate profits to their companies' bottom line during 2000. And they're likely to top that number this year.

Granted, these plans didn't beat the 2000 market. In fact, as a group, they lost almost $30 billion--25 percent of their companies' pension surpluses. But Milliman consulting actuary John Ehrhardt estimates that 16 of the 20 plan sponsors he studied use deferral and smoothing techniques defined by FAS 87, which allow them to spread pension gains and losses over time.

The result is a pleasant hangover from the bull-market days. Back in 1999, 32 of the 87 Standard & Poor's 100 companies with defined-benefit pension plans actually earned more from their plans than from their operations. For corporations that use smoothing, those good times are still rolling.

Companies that chose instead to recognize the fair market value of their pension assets reaped huge rewards, but face sickening earnings hits now that the market has turned. Lucent Technologies, for example, got a huge boost to earnings in 1999 when it switched to a method that more closely aligned returns with actual market value. But its annual report, due out this month, is likely to show the networking specialist is now suffering for that decision. "Companies that used smoothing had a less drastic but still substantial increase in pension gains [when the market was good]," says Ehrhardt, "and now they are coming down to a soft landing instead of falling off a cliff." By contrast, he says, "companies using market value are riding a roller coaster."

Regardless of method, none of the Fortune 100 companies Ehrhardt reviewed in the preliminary study was in danger of underfunding its pensions. A bigger concern for the CFOs of those firms should be whether the long-term average expected plan return of 9.5 percent is realistic. "Unfortunately, people in this field tend to drive from the rearview mirror," says Ethan Kra, chief actuary at William M. Mercer Inc., "and the last 20 years includes the greatest boom market in history."

But without pressure from auditors, few companies are likely to lower their expected rate of return. For a plan with $40 billion in assets, a 2 percentage point reduction in the estimated return on assets would create an annual reduction in pension income of $800 million, says Ehrhardt. "What CFO is going to propose doing that? "

Meanwhile, many smaller companies are in danger of falling below funding levels required by the Internal Revenue Service and Pension Benefit Guaranty Corp., says Milliman consulting actuary Jeffrey Kamenir. Plan liabilities are based in part on a mandated interest rate calculated from 30-year Treasury rates, which have been falling steadily. "Really bad stock performance could be the killer on top of lower Treasury rates," says Kamenir. As a result, he says, many companies had to make additional contributions by mid-September or change their asset method to smoothing. Like smoothing for accounting purposes, that for funding allows shortfalls to be made up over time. But beware--the IRS gives automatic approval to asset-method changes only once every five years. "The 2001 investment year is turning out to be really bad, too, so companies that exhaust their smoothing-method option this year may have to put in contributions next year," says Kamenir.

Employee Advocate note: Duke Energy made the list! Click on the link below to view the list:

Bear Market? What Bear Market? (This is an outside link, and could disappear at any time.)

It's clear from these last few weeks that the crucial jobs don't get the big paychecks.

Low-paid airport security guards missed the hijackers' knives and box cutters.

Low-paid police and firefighters shouldered the rescue work and paid for it with their lives.

Low-paid mailroom clerks now have to worry about spreading anthrax with their daily delivery.

It gives you a fresh perspective. Sort of the same as a glass of water flung in your face.

Suddenly, going to meetings all day seems like useless work. Senior vice president seems like an empty title.

The important people don't wear suits. They wear uniforms or hard hats.

Another way to separate it is by class: Having class vs. lacking it.

The Los Angeles Times told the story of Thomas Bailey, who founded the Janus mutual-fund company.

Just like most big investment companies, Janus has tumbled lately. Its main fund dropped 47 percent from last October to this one.

Bailey decided this was a good time to sell his stake in Janus. But he didn't take the hit everybody else is taking.

He had a private stock deal that included a "look back" clause - meaning he could sell off at last year's prices.

Analysts said that if he'd sold at today's prices, he would have pocketed $200 million to $350 million. Instead, he cashed in for $603 million.

Go to a stockbroker Monday morning and ask if you can sell this year's stock at last year's price.

Listen to the laughter.

Every CEO with half a lick of sense has a back-door exit with a sackful of cash in case things go sour. It's the sort of deal you don't get to write if you are simply a person who pulls old women out of burning buildings. Security jobs require not just physical courage but the skill of concentration. Think about sitting in an airport all day, staring at a screen, watching bags go through a scanner for eight hours. Bag after tedious bag. Then when a blade comes through sideways you're supposed to be on it like a hawk.

It is a job not one in a thousand has the focus to do right. Yet the security companies don't pay enough to attract fry cooks.

Firefighters and police have the same life - nothing for hours, then everything at once. Sometimes life and death 10 minutes after waking up.

Of course many of them consider it a calling. Of course they have the pride to do a good job no matter what. But at some point love of the work is not enough.

Unless your heart is rare and pure, you have to resent making so little for such important work.

Especially when you see others making so much for work that means nothing.

The terrorists are right: This country's values are messed up, but not the way they think.

It's not MTV and bareheaded women. It's guys in pinstripes making millions by shooting craps with entire companies, while people who risk their lives five days a week don't make squat.

In another sign of its weakening financial condition, Polaroid Corp. of Cambridge this week told employees that the company's pension plan is underfunded, possibly threatening benefits to company retirees and current employees. In a memo sent to employees this week that was obtained by The Boston Globe, the company said the plan had more than $900 million in assets on Oct. 1. But that's approximately only enough to pay 90 percent of all of the benefits accrued by employees under the pension plan. If all beneficiaries suddenly retired and sought pension benefits, there wouldn't be enough money to pay the obligations.

The health of Polaroid's pension plan deteriorated quickly. In December 1998, the plan had $1.3 billion in assets, according to a report to employees. Polaroid's pension plan is funded by cash contributions made by the company, which are then invested. In the memo, signed by the firm's executive committee, the company said the plan has suffered from the decline in the stock market this year. ''On Dec. 31, 2000, the last reporting period of the plan, it was overfunded,'' the committee wrote. ''As a result of the depressed economy and aggravated by the recent terrorist attack, the stock market has deteriorated, and this has affected the funding level of our plan.''

The company also blamed the situation on two recent rounds of layoffs, which are intended to bring total employment from 8,865 in December to about 5,500 by the end of next year. The layoffs increased the ''payout volume'' of the plan, the memo said.

The company said it has retained specialists who are ''reviewing the plan and will recommend a course of action that is in the best interest of all pension holders.'' A Polaroid spokesman declined to answer questions about the memo or its impact on retirees. ''The memo was meant for employees, and we're not going to comment on that,'' said Skip Colcord.

One possible solution to the dilemma would be for Polaroid to make up any possible shortfalls with additional cash contributions. But the weakening of the pension plan comes as Polaroid itself is fighting for survival. The firm owes about $950 million to banks and bondholders. After missing payments, it has won concessions from both groups of creditors. But the company must still renegotiate the debt, because it cannot keep up with the scheduled payments and is in violation of loan agreements. Without further concessions, Polaroid may be forced to seek protection from creditors in US Bankruptcy Court.

The company says it is looking to sell all or part of its operations.

The pension underfunding comes as Polaroid employees and retirees have faced a rapid erosion in benefits unprecedented in the company's 64-year history. Last summer, the company told employees and retirees that their co-payments for health insurance would increase to about 50 percent of the total premium, up from about 20 percent.

Besides the pension plan, Polaroid offers its employees a retirement savings plan, which includes a 401(k), a company cash contribution, and a mandatory employee stock ownership plan. That savings plan also has suffered enormous losses. The total investments in the plan declined from $858.7 million on Dec. 31, 1999, to $698.5 million a year later, a drop of 19 percent. That decline included a 67 percent drop in the value of Polaroid shares held by the plan, to $45.7 million from $138.3 million. Polaroid declined to provide current information about the savings plan. According to several sources, employees and retirees who recently tried to liquidate or transfer their savings plan holdings were told the accounts were frozen at Polaroid's request because of problems with the ''cash portion'' of the account. Colcord said the problem has since been rectified, but declined to say why the accounts had been temporarily frozen.

The freeze may have hurt employees or retirees who tried to sell their Polaroid shares. The shares dropped from 72 cents on Thursday to 51 cents Monday, a decline of 29 percent. Yesterday, the shares closed at 55 cents. Since their high in mid-1997 of about $60, the shares have lost more than 99 percent of their value.

Dick Charlton, president of New England Pension Consultants, an adviser to companies and pension plans, said most large companies' pension plans haven't been as hard hit by the stock market declines as has the Polaroid plan. ''Even with the downturns in 2000 and 2001, the cumulative rate of return for the stock market over the past six or seven years has been higher than the long-term average returns, '' he said.

The underfunded pension plan could be a factor in any effort to sell the company, he said. ''An unfunded pension obligation is a huge factor in mergers and acquisitions,'' said Charlton. ''You're either buying a liability or a surplus. That would be factored into the sales price.''

DASHTI QALAH, Afghanistan -- Hundreds of refugees, ragged images silhouetted by the dust, gathered outside the large wooden doors of Shelter For Life International, an American-based aid agency here.

"I am a widow. My children have no food. Please help us," cried one woman from behind her dusty blue burqua, the full covering that women traditionally wear.

Such images are being beamed out each day by the world's media, here waiting for what seems an imminent American military assault against the ruling Taliban and Osama bin Laden's holy warriors.

What much of the world is seeing for the first time is nothing new to John Weaver. He is believed to be the only American aid worker who has refused to leave Afghanistan. For him, the plight of Afghans, uprooted from their homes by war and drought, is all too familiar.

"It took a tragedy in our land for our country to realize the Afghans even exist," said Weaver, 31, the in-country director of Shelter For Life International, which has been providing emergency relief to hundreds of thousands of displaced Afghans for more than three years here.

"As an American, I am devastated by what happened in New York and Washington, but as someone working here, I wonder if Americans really understand the tragedy that has fallen on these people," said Weaver, a North Carolinian who came to Afghanistan a year ago to provide aid.

"Do Americans understand the war and tyranny and drought? Do they really get it back home that all these refugees have been moving around from one crisis to another long before the terrorist attack?"

Dressed in a traditional brown Afghan turban and the long, flowing robes that are worn here, Weaver spoke Persian with a hint of a Carolina drawl as he busily crisscrossed the province in a battered Russian-made jeep, checking on projects and paying his staff. To leave now, he said, would ignore the needs of the people he has been trying to help. Shelter for Life is financed by USAID, the U.N. World Food Program and the Soros Foundation, and it is bracing for what is widely believed to be a wave of up to 1.5 million refugees fleeing the heart of Afghanistan for the neighboring countries of Pakistan, Iran, Uzbekistan, Tajikistan, and the parts of northern Afghanistan under the control of the anti-Taliban Northern Alliance.

The world's aid agencies, including the World Food Program, the International Red Cross, Medicines Sans Frontieres and about a half-dozen other providers, pulled their foreign staff workers out of this country in the days after the Sept. 11 attack on America when it became clear their lives were at risk.

Even before the current crisis, Western aid workers were imperiled by the ruling Taliban. The Taliban eye the charities with contempt as Trojan horses of Western values and religiously based charities as a dangerous influence of Christianity in a puritanical Islamic dictatorship.

The most dramatic illustration is the eight Western aid workers, including two Americans, who are still being held by the Taliban pending a trial on charges of blasphemy against Islam. The charge, conspiring to spread the message of Christianity, is punishable by death under the rule of the Taliban.

The fate of these eight people is still hanging in the balance while the United States prepares for military strikes on the Taliban. A report this week on Iran Radio said the Taliban were giving their attorneys one more week to prepare their case before it goes to trial.

The eight aid workers were from Shelter Now International, which is affiliated with Shelter For Life.