Time magazine’s article, “The Broken Promise,” features a cover proclaiming “The Great Retirement Ripoff” with winged currency flying away before a worker’s upraised eyes.
The New York Times chimes in with “The End of Pensions?” subtitled, “’s next financial debacle.” The cover blurb blares, “We regret to inform you that you no longer have a pension.” The artwork shows an elderly man with bowed head seated on a stool in a bare room.
“Workplace Tremors” is the Washington Post’s commentary which includes a cartoon with a worker with a lotto ticket in his hand declaring, “It is the new company-paid pension plan.”
Get the picture? Over the years Congress, globalization, the world’s most expensive yet flawed health care and greedy CEOs conspired to rob American workers of retirement security!
All the articles agree that the defined benefit pension—once a sturdy leg of a worker’s retirement stool—is on the way out.
In Minnesota , the Minneapolis Star Tribune recently pointed out that in 1984, 54 percent of companies had defined benefit plans. By 2004, that number fell to 15 percent. Nationally in 1980, some 40 percent of private sector companies had defined plans, today only 20 percent.
Everyone blames the flawed Chapter 11 of the 1978 Federal Bankruptcy Act and friendly judges for the ease with which companies shed their pensions, health benefits and union contracts while hanging on to overpaid executives. And when one company drops its pension plan, competitors use that as their excuse.
Warns the Washington Post, “Whether an assembly-line worker or middle manager, an employee can no longer assume that promises made earlier—health benefits or fully funded pensions—will be there when he or she retires.”
Congress even crafted a law created to protect employee pensions so that companies could dump their insolvent pension plans on the Pension Benefit Guaranty Corporation now $23 billion in the red. The debt can reach $28 billion by year’s end. The PBGC guarantees pension up to a ceiling, but doesn’t cover health benefits.
Blame the complex formula set up by Congress which allows corporations to conceal huge shortfalls in their pension fund contributions. Again, the articles agree that the PBGC could be left holding a $100 billion empty bag in a few years. Will taxpayers come to the rescue?
In the meantime, firms with solvent defined benefit pension plans must pay higher premiums to the PBGC, another reason to drop their plans.
Will the Republican Congress change both faulty laws to protect employee pensions?
General Motors bombshell announcement of future plant closings warns that even more pensions may be shot down like clay pigeons.
Remember the real issues and be very angry when you vote in the 2006 elections!
Ron Cohen, former communicators director for the Minnesota AFL-CIO, is active in the Minnesota State Retirees Council, AFL-CIO.