Nary a week goes by without some discouraging news on the retirement front. Last week was no exception.

The least distressing development emerged on Monday from Standard & Poor's, which evaluated the pension plans of the 369 S&P 500 companies that sponsor defined benefit retirement plans. By S&P's calculations, the plans were underfunded to the tune of $164 billion at the end of last year, making them not much healthier than they were at the end of 2003, when the deficit was $165 billion.

S&P said 55 of the plans had surpluses at year-end, 311 had deficits and assets matched liabilities in the remaining three plans. By comparison, at the end of 1999, S&P 500 members had a cumulative pension surplus of $280 billion, with 296 overfunded and 86 underfunded plans.

"With expected below average market returns and modest increases in interest rates for 2005, funding should improve slightly, but still remain underfunded in the $140 billion to $150 billion range," says S&P's David Blitzer.

On Tuesday, S&P 500 member Hewlett-Packard announced that, as of January, it will freeze the pension and retiree medical benefits of employees who don't meet criteria based on age and years of service.

Instead, the company will increase its matching contribution to most employees 401(k) plans to 6 percent from 4 percent.

Employees are entitled to pension benefits earned through the end of the year, but after that, the 401(k) match will be Hewlett-Packard's only contribution to the retirement security. That's for those who still have jobs. HP also announced it will reduce its work force by 14,500, or 10 percent, over the next 18 months.

At the end of last year, the company's pension plans could cover about 82 cents of every $1 in pension benefits current and former employees had earned. The company contributed $10 million to its U.S. pension plan in 2004 and $564 million to pension plans outside the United States. Defined contribution retirement plans cost HP another $405 million last year.

In additional to the usual retirement expenses this year, HP has one unusual item to cover: the $21.2 million cost of retiring HP chairman and chief executive officer Carly Fiorina.

The last bit of dark retirement news came Wednesday from another S&P 500 constituent, Unisys. The Blue Bell, Pa., information technology services firm reported a second- quarter loss of $27.1 million.

Unisys made it clear it would have reported a profit of $4.1 million were it not for a pretax pension expense of $45.8 million. Sure, there was weak demand for Unisys servers and some troubles with outsourcing contracts, but "excluding pension expense, we posted a small profit in the quarter," said President and CEO Joseph W. McGrath.

I'm sure the hubris of McGrath's explanation of the loss was not lost on Unisys employees. They probably weren't expecting their fearless leader to mention the fact that Unisys Chairman Lawrence A. Weinbach, whose salary was $1.4 million last year, will receive an annual pension of $1 million under the terms of an employment contract he signed in April 2004. Weinbach will serve as chairman through January.

Since Weinbach joined the company in 1997, Unisys shareholders have endured an average annual loss on their investment of nearly 11 percent. By comparison, owning the S&P 500 index would have given them annual returns of 4.5 percent while owning the index of S&P 500 information technology stocks -- Unisys' competitors -- would have given them 1 percent annual returns.

Sounds like pesky pension expenses aren't the only issue Unisys faces.

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The Internal Revenue Service's initiative against abusive tax shelters involving stock options proved to be an offer most corporate chieftains couldn't refuse.

IRS officials say 80 of the 124 executives targeted by the probe have agreed to the terms of a settlement offer the agency made in February. They will pay taxes on income they were attempting to defer as well as interest and a 10 percent penalty. Another 15 settled as the result of IRS audits.

Here's how the basic scheme was supposed to work. Executives transferred their lucrative stock options to a family limited partnership or other related entity in exchange for an IOU payable in a lump sum as far as 30 years in the future. The partnership immediately exercised the options and sold the stock, leaving it with a big pile of money.

Normally, exercising options is a taxable event, requiring the executive to pay taxes on the difference between the exercise price on the option -- what the executive paid for the stock -- and the market price -- the price received when the stock is sold.

The architects of the tax shelter argued taxes weren't due until the trust repaid the IOU. The IRS ruled otherwise, a ruling that's being challenged in court. The popularity of the offer indicates most executives aren't counting on the court overturning the IRS interpretation.

The agency determined that 10 of the 124 executives it looked at weren't involved in abusive tax shelters.

Another 15 of the 124 executives settled after IRS audits. Combined, the 95 executives are facing taxes on as much as $500 million in income. The 19 who did not settle are either being audited or are the subjects of criminal tax investigations. The IRS alleges they underreported their income by more than $400 million.