(MONEY Magazine) – STARTING IN MID-SEPTEMBER, AN ESTImated 4 million employees and retired workers at 1,500 large companies--including Northwest Airlines and Westinghouse--will get an unsettling letter from their employers. The gist: The firm's pension plan may not have the money it needs to pay the benefits you have been promised. Scary news, to be sure. But if you find one of these letters in your mailbox, don't be too alarmed--yet.

Here's what's up: Under the Retirement Protection Act passed by Congress last year, companies that have more than 100 employees and pension plans with less than 90% of the cash needed to pay promised benefits must alert their workers about the shortfall once a year. Small firms will have to do the same starting next year.

Yet in spite of aggregate pension shortages of $71 billion, most underfunded pensions remain secure. "Underfunding is a grave concern only when a company faces a financial crisis or bankruptcy that causes it to stop contributing to the pension altogether," says Karen Fer guson, director of the Pension Rights Center, a nonprofit public interest group in Washington, D.C. and coauthor of Pensions in Crisis (Arcade, $22.95). Moreover, most pension benefits are insured up to certain limits by the Pension Benefit Guaranty Corporation, a federal agency. In 1995, for example, Uncle Sam would pay up to $2,574 a month for a 65-year-old in a failed pension plan.

That said, don't be overly complacent either. As Labor Secretary Robert Reich recently told Money: "Of the 8 million people who are in underfunded pension plans, 1.2 million work for troubled companies. These employees particularly need to be aware."

If you receive a notice, follow these steps:

Get the facts. Ask your company's pension administrator why the plan is underfunded. A growing, profitable company may have a perfectly good reason for coming up short. For example, it may have just improved pension benefits but not yet contributed money to the plan to pay for them. Conversely, consider it a red flag if the plan is underfunded because of more persistent problems such as repeated poor investment returns. In that case, question the administrator closely about how your employer plans to make up the shortfall. Also ask how much of your benefit is insured by the PBGC. For example, benefits introduced or increased within the past year would not be covered. Benefits in place for less than five years would be only partially protected.

Check out your company's financial health. Since your pension's safety is tied to your company's financial health, read your employer's annual report and its profile in the Value Line Investment Survey; you can often find the latter in your local library. If, in addition to having an underfunded pension, your company is ailing, take note. But don't make a knee-jerk decision to leave, warns Robert Kryvicky, a partner at Ernst & Young in New York City. If you are close to retirement or vesting, hanging in there will result in a higher payment later on, even if the gov ernment insurance kicks in. Plus, your company may turn itself around, as many do.

Increase your other retirement savings. Even if your company is healthy and its pension woes seem tem porary, consider a notice of underfunding as a reminder that you dare not rely entirely on your employer for your well-being in retirement. So look for ways to beef up your other retirement accounts, such as your 401(k) or IRA.

-Kelly D. Smith