Opinion: United Airlines and the US Pension System

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:

Taxpayers at risk: Congress needs to get serious about enacting pension reforms, Rochester (NY) Democrat and Chronicle (18 May 2005)

Remember that sucking sound that Ross Perot often talked about during the 1990s in describing American jobs leaving this country? It's back. Not only are jobs disappearing, but so are hard-earned, once-protected pensions...

The PBGC has lost an average of $10 billion a year over the past three years alone. And in fiscal 2003-2004, the agency suffered the biggest deficit in its history — $23.3 billion...

Now consider that other major airlines such as Delta and US Airways are on financial cliffs. Then there's the nation's largest automaker, General Motors. Its financial outlook is precarious to say the least.

Something has to give, and PBGC can't deliver what it doesn't have. Congress must get serious about pension reform. It should start by requiring companies to increase pension premiums and make it harder for companies to dump their pension plans on PBGC.

Retirement Worries, Winston-Salem (NC) Journal (18 May 2005)

The ruling, which has serious implications for workers beyond United's gates, came shortly after President Bush announced his proposal to cut promised Social Security benefits to all but the poor. Combined, these developments could mean workers could no longer rely on income promised them by their government and employers...

Over the past two decades, the nature of employer retirement programs has changed markedly. Pensions are now promised to only about one-fifth of all workers and, increasingly, employers are having difficulty living up to those promises. Most employers who give retirement benefits now do so through employee-controlled 401(k) savings programs.

But such programs are much less secure than was a promised pension. That is why Bush's Social Security proposal would be so harmful to the middle class. For most middle-class retirees, the Social Security check is the only guaranteed income they will have. Other income will depend on the whims of markets, interest rates and their own investment acumen.

The United pension ruling affects only that company's workers, but it should frighten all Americans who wonder how they will support themselves in retirement.

http://toledoblade.com/apps/pbcs.dll/article?AID=/20050518/OPINION02/505180312/-1/OPINION]Fly the Bankrupt Skies, Toledo (OH) Blade (18 May 2005)

THE decision of a federal bankruptcy judge to allow United Airlines to shuck responsibility for its four employee pension plans is a terrible precedent that will encourage similar action by other businesses...

Americans in general have a right to be cynical about this pension default, the largest in history by a U.S. corporation, especially in view of the punitive new bankruptcy laws recently passed by Congress that were aimed at individuals...

If the United case is prologue, American taxpayers had better fasten their seat belts and hold onto their wallets. It could be a turbulent and expensive trip.

Bailing out, KRT (Ft Wayne IN), (18 May 2005)

President Bush is proposing reforms that would require companies to fund 100 percent of their pension obligations within seven years and pay higher premiums to the Guaranty Corp. Companies and unions are fighting both ideas. To CEOs, the added costs will crimp profitability, while unions fear that companies will be driven to abandon pensions altogether.

But Bush is clearly on the right track. Taxpayers, most of whom do not have pensions, shouldn't have to pay the freight for those who do.

The Brass Handshake, SitNews (Ketchican, AK - 17 May 2005)

If the largest pension default in U.S. history isn't a warning shot, it's hard to say what is - and harder to say who, outside of a rarefied circle of pension experts, is listening. Remember, the country sleepwalked into the savings-and-loan crisis and that cost us $200 billion to untangle...

Social Security reform is all well and good, but the warning shot from the United case is that it must inescapably be part of a national rethinking of how to finance the retirements of low- and middle-income workers.