Retirement Roulette

Don't Gamble With My Pension

Pilfering Pensions

Execs Screw up; Want Labor to give up Nest Eggs

When workers put decades of their lives into a company, paying part of their checks into a pension fund, they have a right to expect a decent retirement-or at least they did. Earlier this month a court decision cleared the way for United Airlines to shift all four of its major pension plans - including $6.6 billion in liabilities - to the Pensions Benefit Guaranty Corp., a government agency that guarantees worker pensions, but at a much lower rate. United, which has lost nearly $10 billion since 2001, employs 15,200 people in California.

"America's working families deserve a fair and secure retirement, and fewer and fewer are getting that today," said AFL-CIO President John Sweeney. "The situation at United underscores the tremendous pressure that America's big businesses are putting on workers, squeezing wage and benefits at every turn, while CEO pay soars and too many jobs continue to be sent overseas." Immediately after the court passed down its decision, United Airlines started seeking additional concessions from its employees, which are now threatening strikes.

Industry pundits said other airlines hemorrhaging money, including American, may now seek similar concessions. And US Airways, a smaller carrier than United, shifted pensions to the PBGC in February.

As big corporations such as United push pension liabilities onto the government, the burden of making up any short falls will land on the taxpayer, instead of the corporation that mismanaged the money in the first place, said labor supporters. "No 401(k) plan will ever mean as much to America's workers as a solid pension, and our nation's policies should support guaranteed pensions, rather than undermining them," said Sweeney.

Meanwhile, Gov. Arnold Schwarzenegger publicly backed away from a state pension reduction plan that would have forced teachers, school employees, nurses, police, firefighters and all public servants into 401(k)-style plans that also eliminate their death and disability benefits. The governor's withdrawal was the result of considerable political backlash, mainly from the widows of fallen police officers. Yet the governor is continuing the push to privatize those pensions, leaving public employees who do not receive social security to gamble their retirement funds on Wall St. In other words, the continued withering of retirement benefits.

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