Jerry Okamura
There's more to it than that. Your lesson is general. In particular, we as taxpayers have to be wary of more corporations that may dump their pensions on the PBGC. That and the harm done to the retirees is why I have already been raising this issue. You can even state as a conservative that there's crooked behavior here as well as shabby treatment of the employees. It shouldn't have to take working at a bad company or for bad people (I've worked in many places all over the USA and seen bad as well as good) for you to understand. Enron's top people certainly were criminals and cruel to their employees, were they not?
Moreover, aside from ugly feelings you may or may not have toward specific cases (it is stupid to be anti-business or anti-capitalistic in general, as well as against American ways, and I certainly am not), the more pressing larger problem is that of this building pension crisis (I am not abusing or hyping that word) and the legitimate concern that beginning with the airlines, companies will dump their pension plans on the taxpayers (even if they aren't truly in distress), the compebreastors will race to do the same thing to remain compebreastive, and the already-in-trouble PBGC will need a bailout eventually.
This dumping of pensions onto the PBGC will continue, along with conversions to cash-balance plans that significantly lower retiree incomes. If that's done often or greatly enough, even if you or I don't like the prospect, there may well be a big clamor for more bailouts and larger benefit payments to the retirees.
And then will come bailout demands for defined-contribution plans that fail.
And this is all totally aside from the ending by companies of retiree health and other benefits, which the companies have every right to do and which makes absolute sense in itself (the people aren't working for the company any more), but which nevertheless is going to become our problem sooner or later -- with larger Medicare costs.
And see below for not in Continental Europe, where disaster that's worse awaits, but the UK. Included at the bottom is a story about another bankrupt US corporation and how a pension plan may be dumped on the UK's analogue to the PBGC.
First, though: The following makes no sense in a vacuum, given that the airline is in danger of extinction, literally, but makes sense if the emotions of the people involved are taken into consideration. Concessions make perfect sense, but why would there be a great desire to make them after learning about the pension games? And secondly, Kerry the idiot is nowhere on this issue; it's up to his senior liberal politicians to step in and make the expected noise instead. Is Kerry going to sign Kennedy's letter, or decline, and also not answer questions about this issue?
US Airways Group Inc.'s unions, defying efforts to win labor concessions to avert a bankruptcy, are unlikely to give up pay and benefits under a threat of cuts imposed by a court, a labor leader and consultants said.
``The only way this airline is going to survive is mbuttive labor concessions'' that quickly would give it more cash for daily operations, said Bill Brandt, president of Chicago-based restructuring firm Development Specialists Inc.
Workers, especially those who believe they might find jobs, might be willing to let the carrier fail rather than accept more cuts, Brandt said. Four pilot union leaders, who blocked efforts to let members vote on a proposal, have a similar view, Mann said.
``The reason you've got this really entrenched position is folks are saying, `We've been here, we've heard this, you didn't make the changes you said you'd make the last time,'' he said. ``What's different this time?''
Capitol Hill letters press UAL on pensions
Drafts making rounds in Congress urge preservation of funds
"We are writing to express our strong opposition to United's decision to end contributions to its pension plans and its threat to terminate the plans altogether," says a draft letter to Tilton, prepared by Rep. George Miller of California and Rep. Jan Schakowsky of Illinois, obtained by the Rocky Mountain News.
The letter stresses that Congress took action to protect airline pension plans earlier this year by pbutting legislation that let the carriers stretch out deadlines to replenish their plans.
"Members of both political parties supported this relief, because we believed, based upon representations by you and other airline executives, that this action was necessary to preserve the pension funds," it says. "Now, a few months later, we learn that United may end its pension obligations."
Sources said a similar letter is being circulated by Kennedy, who represents Mbuttachusetts and is the senior Democrat on the Senate Health, Education, Labor and Pensions Committee.
"There is widespread fear that United's termination would lead to additional pension defaults in the airline industry."
"We believe that this is an attempt by United to sidestep its obligation to employees despite Congress' repeated efforts to provide pension contribution relief so that they would not have to make such harsh decisions."
...
Johnson - Government will "encourage" people to work later, not force them
The Sunday papers tipped union bosses to call for the introduction of a compulsory second pension, with new laws forcing workers to pay five per cent of their earnings into a retirement fund and employers made to make contributions of at least 10 per cent.
Government makes pension pledge
The Government has promised new laws to make sure that half of pension scheme trustees were nominated by workers and said it would not force people to work until the age of 70.
TUC demands pensions action
The TUC has warned of more strikes to defend pensions unless the government acts to ease the growing crisis.
Minister's pensions pledge to TUC
New Work and Pensions secretary Alan Johnson has pledged to increase the amount people are saving for their retirement, during a speech to the TUC. But he stopped short of agreeing to union demands for compulsory contributions to company schemes.
How can the pensions crisis in the UK be resolved?
U.K. Unions Ask Government to buttist Federal-Mogul Workers
U.K. unions called on the government to intervene on the behalf of members of the British retirement plan of Federal-Mogul Corp., a U.S. auto-parts maker forced into bankruptcy by asbestos lawsuits.
Trustees in the pension fund of Federal-Mogul's U.K. unit, Turner & Newall Ltd., in August rejected an offer from Federal-Mogul's creditors, led by Carl Icahn, the company's largest single creditor, to contribute $130 million to the plan.
Federal-Mogul's creditors must pay 232 million pounds ($416 million) over eight years to ensure the U.K. retirement plan's viability, according to the pension trustee. As many as 40,000 members risk having their savings reduced if the fund is closed.
If no agreement can be reached between the pension trustees and Federal-Mogul's creditors, Amicus wants the government to include Turner & Newall employees in the new Pensions Protection Fund that is being introduced to help workers who lose their pensions due to a company collapse.
Dave Simpson