May 19 2005
An overview of editorial opinion on the United Airlines move to shed its pension obligations and the state of pensions in the United States. From coast-to-coast (and in-between), the refrain sounds the same:
Responsibility, Please, Pittsburgh Post-Gazette (19 May 2005)
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United Airlines -- as did US Airways before it -- hopes to take off now that it unloaded its excess baggage onto the Pension Benefit Guaranty Corporation. But it could be taxpayers left holding the bag...
If corporations continue taking the easy way out by making pension promises they cannot hope to keep, only to dump them onto the PBGC, this nation's economy could be on a nonstop flight to economic ruin.
The short-term fix is to raise the premiums corporations pay for PBGC rescues. The long-term fix, of course, is for corporations and labor to negotiate responsible contracts.
Pension fiasco: Share the pain, Santa Marie (CA) Times (17 May 2005)
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While United's rank-and-file try to figure out how to survive on reduced benefits, [CEO] Tilton will be taking to the bank $4.5 million United put in trust for him. Just three months after taking over at United, Tilton guided the airline into bankruptcy and engineered the forfeiture of United's pension responsibilities. Meanwhile, perhaps seeing the writing on the wall, he had already cashed in on $3 million from those guaranteed retirement trusts...
We have an idea, and it's not altogether original. Congress should make it more difficult for companies to shed their pension obligations. And lawmakers could begin with one, simple rule: Before the government will agree to take over a private pension plan, that company's top executives have to agree to give up their golden parachutes. There is no logical reason why all the pain needs to be concentrated on a company's ground floor.
The lessons of United: Pensions are at risk everywhere, Sacramento (CA) Bee (17 May 2005)
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Could what happened at United happen at Delta or American? How about GM or Ford ? How about your company? For many American workers, the short, scary answer is, yes...
The Bush administration's flawed plan to shore up the PBGC by raising premiums from $19 to $30 per covered employee is likely to accelerate the demise of defined benefit plans to the detriment of American workers. It forces healthy companies that have acted prudently and funded their systems responsibly to subsidize the imprudent companies such as United. Rather than accept United Airlines' pension default, critics argue persuasively that the government should have pushed the airline and its unions to renegotiate lower benefits. That would have averted a $6.6 billion hit on the insurance fund, a growing deficit that threatens PBGC's solvency and which Bradley Belt, the PBGC's executive director, told Congress last month could lead to calls for taxpayer bailouts.
That must not be allowed. American workers, a growing majority of whom have no employer-paid pensions at all, should not be taxed to pay the relatively generous pension benefits for the few workers who still have generous guaranteed benefits.
Capitalist-socialism, Washington Times (18 May 2005)
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America is at a crossroads, thanks to the combinationof UnitedAirlines' record $10 billion pension default and the Pension Benefit Guaranty Corp.'s operating deficit. A major challenge to conservative thinking is taking shape before our eyes. Capitalists are urging socialist measures to address the looming pension crisis. Unless clear thinking prevails in Congress, American corporations will succeed in shifting their employee obligations from the private sector onto the taxpayers...
Every three days on average, a company defaults on its pension promises to employees and shifts the burden to the Pension Benefit Guaranty Corp., or PBGC...
Earlier this year, the administration proposed legislative changes that preserve the current system of private financing and ensure the PBGC's solvency. Business groups are fighting the changes because they create new costs for companies. As a result, Congress and the White House are considering a taxpayer bailout.
If corporations succeed in making this matter of private contract law a social obligation, we will have taken the first step into capitalist-socialism.
