As workers monitor their debilitated retirement savings accounts, the dwindling number of employers offering pension benefits are doing the same. They aren't finding the picture any prettier.

Wall Street is off more than 20 percent this year -- about half as far as it fell between 2000 and 2002. Back then, many pension funds were decimated by an event pundits referred to as "a perfect storm": the most calamitous market decline since the Great Depression compounded by falling interest rates, which wreaked more havoc on pensions.

Since then, Congress has enacted rules requiring companies to make up pension fund shortfalls more quickly. Lawmakers also imposed restrictions on how pension funds can pay benefits when they are less than 80 percent funded -- or have less than 80 cents in assets for every $1 in benefits they are obligated to pay. More stringent restrictions kick in once a plan is only 60 percent funded.

For many employers, the day of reckoning will come at year-end. That's when they will have to match up the assumptions they made about how well their pension funds would perform this year with the damage Wall Street's slide has done to their portfolios. For some, projections of what they would have to contribute to their pension funds will have to be revised upward, crimping their profits going forward.

"This market decline is becoming more of a worry in the last six weeks because there hasn't been any indication it's going to turn around in a short fashion," said Michael Pisula, owner of Phoenix Benefits, a Brentwood pension consultant.

Pension funds with a higher percentage of their assets invested in the stock market will be hurt the most. But bonds and other types of investments pension fund managers can select from are not performing well either. The $33 billion Pennsylvania State Employees' Retirement System was down 2.9 percent as of June 30. Through July, the $738 million pension fund covering Allegheny County employees and retirees was down more than 5 percent.

"This is not one of those situations where stocks are going down and other things are up," said John Ferreira, an attorney with Morgan Lewis & Bockius who specializes in benefit issues.

Pension funds have one thing going for them they didn't have when the market bubble burst in 2000. Assumptions they make about how much money they need to invest to meet their obligations include one based on interest rates. The higher the interest rate, the more they can expect their money to earn. All other things being equal, higher interest rates reduce their pension fund contributions.

Frank Reagan, a retirement practice leader with consultant Watson Wyatt, estimates a quarter-percentage point rise in the interest rate reduces the funding obligation by about 5 percent. However, even if the interest rate rises a half of a percentage point and they get a 10 percent break, "if they lost 20 percent of their assets, it will still be very painful," Mr. Reagan said.

Unless the market makes a miraculous recovery before year-end, the tougher federal funding requirements mandated by the Pension Protection Act of 2006 could force companies to come up with cash for their pension funds. Mr. Reagan said that given the anxiety in credit markets, "it obviously is going to be harder for them to borrow the money, and it will probably be more expensive for them to borrow the money."

The new law limits so-called "shutdown" benefits pension plan sponsors used to pay when they closed plants. It also limits paying out pension benefits in lump sums when a plan is between 60 percent and 80 percent funded. Under some circumstances, pension funds less than 60 percent funded will be required to freeze benefits until the plan regains its footing.

"If you're below 60 percent, you're in big trouble," said Beth Shimshock, a senior retirement consultant with Towers Perrin.

The 2000-02 perfect storm prompted many companies to file for bankruptcy, transferring their pension obligations to the Pension Benefit Guaranty Corp., the federal agency that insures corporate pension benefits for 44 million Americans. In February, the federal agency changed its strategy for investing the $55 billion in its portfolio, increasing its stock market exposure to 45 percent vs. its previous allocation of 15 percent to 25 percent.

Other companies responded to the 2000-02 stock market decline by freezing benefits or putting pensions off limits to new employees.

Just as it's difficult to predict how Wall Street will perform in coming months, it's hard to predict how the dwindling number of pension plan sponsors will react to the market turmoil. Mr. Reagan says companies in health care, engineering and other industries in which the labor market is tight might maintain pension plans as a way to attract good employees. Other companies may freeze pension plans and shift employees toward 401(k) plans, he says.

Mr. Ferreira believes that a monthly pension check could become an ever rarer commodity.

"The defined benefit plan is already kind of on its last breath. This may be the coup de gras," he says.