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Trade Unions
and
Pension Issues
- Archives 2005 -
Also see our site on
Private
Pension Issues , Social Security and
World Pension Issues
PERS
Retirees Wait to See How Much They Owe (November 29, 2005)
Public employees have separate retirement funds in many states. Those who
participate in a Public Employee Retirement System (PERS) tend to face
different challenges when planning to retire, as Social Security benefits
may be reduced and because PERS plans have come under scrutiny. Follow one
Oregon woman's story who was forced to retire seven years early from her
position as a public employee just to try to save her pension funds, only
to find out her monthly payments were about to shrink.
Steel Workers' Pensions Discussed (November 10, 2005)
Members of the United Steelworkers of America have mixed feelings about
pension reform legislation pending on Capitol Hill. Union leaders claim
that, while there are some positive aspects of the reforms such as
requiring full pension solvency in seven years, there are other provisions
that jeopardize the future of defined benefit pensions. The bill calls for
employers to make increased premium payments to the Pension Benefit
Guarantee Corporation (PBGC), a potential incentive for employers to
convert to lower paying defined contribution plans or to drop pension
plans all together.
Workers, Unions and Pension Funds (Fall
2005)
United Steelworkers of America (USWA) retirees highlight the integral role
played by the labor movement to secure pension benefits for working
Americans. Eighty-three per cent of union workers have access to
retirement benefit packages, while only 44% of non-union retirees are
covered. USWA focuses on the importance of worker representation on
pension boards to safeguard against decisions that may be skewed against
retirees.
Fundamentally
Broken Pension System In 'Crying Need' Of A Fix (October 15, 2005)
Reforming the Pension Benefit Guaranty Corp, the federal insurer,
continues to be a pressing issue to thousands of Americans. With major
airline corporations and other brand-name corporations going out of
business and defaulting on pension obligations, the task of reform is even
harder. Not all companies default on their obligations and leave their
workers abandoned. AK Steel, a mid-size company from the steel belt, still
recognizes pensions' importance. There are many other companies just like
AK Steel that strive to meet their obligations. Sadly there are some
others that abuse the system. Reform plans on the table now need to
recognize these realities and make changes that recognize them.
Pension
Agency Casts Shadow on GM Sale (November 9, 2005)
The Pension Benefit Guaranty Corporation (PBGC) may force GM to contribute
windfall profits derived from GM's sale of its finance business to the GM
Pension Fund. PBGC may also demand a contribution into its own funds. PBGC
is left with no choice considering that GM has low credit ratings that are
well below investment grade and an extremely underfunded pension plan.
Lots of controversy surrounds the future of GM, including if its workers'
pensions will be handed over to the federal insurer, the PBGC.
End
of Pensions (October 30, 2005)
This detailed evaluation of how major US companies have betrayed their
employees by underfunding their pension funds reflects the recent
financial struggles of major US companies. Major employers cannot pay the
deferred wages held in company pensions to their current and former
employees. While private pensions that are offered by large companies like
GM and Delphi are struggling, so are the public programs paid by
taxpayers. Public pensions are underfunded by at least $300 billion. Some
states have divested themselves of pensions all together or frozen
pensions so that no more money can be invested. Others are denying a
pension to new employees. Other firms are adopting a new system called the
cash-balance plan which will primarily appeal to younger and more mobile
employees. With the collapse of many pension systems, many elderly will be
forced to keep working-if they can-just to stay out of poverty. Some
believe that the Bush administration would not even mind if pensions
disappeared. Read this in-depth discussion about the unfortunate future of
US pension schemes.
SEC
Probes GM's Pension Figures (October 27, 2005)
The US Securities and Exchange Comission (SEC) is investigating the
pension reporting practices of General Motors and DaimlerChrystler. These
companies current pension obligations are unclear, especially in light of
the recent bankruptcy filing by GM parts supplier Delphi. Hopefully the
SEC investigation will give retirees a clearer understanding of what
benefits they are entitled to from their employer.
Demands
for Labor Givebacks Grow More Aggressive(October 27, 2005)
The labor movement in the US has traditionally set the precedent for wage
and benefit standards for both union and non-union workers. Recent
negotiations between the United Auto Workers (UAW) and General Motors (GM)
increased health care costs for retirees. Now, labor unions across the
United States, from the Communication Workers of America (CWA) to the
International Federation of Professional and Technical Engineers, expect
corporations to demand similar terms for retirees in future contracts.
With health care costs on the rise, will labor and management be able to
strike a balance between achieving cost competitiveness and protecting the
interests of current and future retirees?
Lawmakers:
Auto Industry Needs To Work With Labor On Legacy Costs (October 25,
2005)
Lawmakers from industrial states call for reforms to help the
manufacturing sector deal with legacy costs and become more competitive.
Michigan Governor Jennifer Granholm suggests that the federal government
implement a catastrophic health care coverage plan to reduce health care
cost burdens for employers. Sen. Debbie Stabenow (D-MI) fears Medicare and
Medicaid cuts will increase the burden on manufacturers to pick up rising
health care costs. Innovative health care and trade reforms could improve
the financial health of heavy industry while protecting health care
benefits for retirees. Is this the thin edge of the wedge to secure public
health insurance for all.
Delphi
Bankruptcy Update (October 21, 2005)
IUE-CWA President Jim Clark chastised Delphi officials for proposing
significant benefit and wage cuts for current workers and reserving the
right to terminate pensions under bankruptcy protection. Labor leaders
within IUE-CWA, the union that represents Delphi employees across the US,
question Delphi's ability to improve their financial status, even if
givebacks are granted.
Ford, DCX Want Deal UAW Gave to GM (October 19, 2005)
Ford and DaimlerChrystler are expected to follow General Motors' (GM) lead
to negotiate with the United Auto Workers (UAW) to cut retiree health care
and pension benefits. The GM agreement with the UAW scales back retiree
benefit costs by 25% over the next seven years.
GM
Employees, Retirees Fret Over Insurance Change (October 18, 2005)
General Motors (GM) retirees expect their health insurance costs to
increase following a deal to improve GM's financial standing by cutting
benefits. GM anticipates the cuts will translate into a $200 per month
savings per each of their 321,000 retirees.
Grinstein
Says Delta May Ask Retirees To Return (October 18, 2005)
Delta Airline's CEO wants retired pilots to return to the cockpit as a way
to curtail labor shortages and expand international service. Many pilots
took early retirement in anticipation of the airline filing bankruptcy in
September. Corporate leadership hopes the Airline Pilot's Association (ALPA),
the union that represents Delta's pilots, will agree to send retirees back
to work. Increased international routes could assist Delta in bankruptcy
restructuring.
Boeing, SPEEA Gear Up for Contract Negotiations
(October 14, 2005)
The Society of Professional Engineering Employees in Aerospace (SPEEA), a
labor union representing salaried engineers, enters a new round of
contract negotiations in November with aviation giant, Boeing. It is
expected that union leadership will make retirement protection top
priority, asking to include health care and pension provisions in their
new contract.
Now
For the Reckoning (October 13, 2005)
Rising health care costs and mounting pension burdens are causing many
American employers to think twice about providing retirement benefits.
Large industrial and manufacturing-based companies, such as General Motors
(GM), traditionally offered employer funded pensions along with health
care coverage for retirees. GM pays health insurance costs for
approximately one million retirees nationwide, costing the carmaker $1500
per vehicle to pick up the tab for current and retired employee health
benefits. Many American companies facing mounting legacy costs have filed
for bankruptcy, a move that has left many retirees without the pension
they worked for and the promise of much needed health care benefits. In
Europe, a national public health program gives health care to workers and
their families, removing most of this cost from the employer.
Expert
Blasts Delphi Severance Payments (October 12, 2005)
Experts and activists criticize Delphi's severance package offered to
executives. Critics, including Michigan Governor Jennifer Granholm and
United Auto Workers (UAW) President Ron Gettelfinger, view the severance
pay as overly generous, particularly in light of Delphi's poor financial
health that has left the pension fund for retired employees with a $10.8
billion shortfall. The Pension Benefit Guarantee Corporation (PBGC) will
cover less than half of the funds needed to pay out retiree benefits.
Delphi
Presses for Cuts (October 11, 2005)
Delphi's filing for Chapter 11 bankruptcy may have serious repercussions
on General Motors (the parent company) and their workers as well because
of the labor pact that states that Delphi UAW (Union Automobile Workers)
workers benefits will match the workers of GM that they both share. Delphi
Corporation Chairman and Chief Executive Officer Robert S. Miller said
that it is possible to save its pensions for their U.S. workers but under
the condition that they would agree to work for a third of their old pay
and benefits. While the workers would get a pay cut, top executives would
receive a 10% bonus. The UAW opposes such largesse to the management that
brought Delphi into bankruptcy. At the moment union workers have to decide
whether to maximize the pay and benefits for active workers or to maximize
the chances for saving some portion of the pension plans. The company
management failed to meet its contractual agreement with the workers. . .
.and now the workers must suffer. Where is justice?
Delphi
CEO Sees Major Downsizing in Bankruptcy (October 10, 2005)
The largest U.S. auto-parts supplier finally filed for Chapter 11
bankruptcy this past Saturday after failing to receive the bailout money
from parent GM and its union, the UAW. They are currently waiting to see
if the federal government will take over their pension obligations. In an
ugly corporate greed move, the company raised the pay of a number of
executives so that they could exit comfortably. Not so for the line
workers. The company wants to reduce workers' wages and close or sell a
considerable number of manufacturing sites in U.S and in Canada that are
not profitable. Mr. Miller, the bankruptcy specialist, has stated that
even through the bankruptcy process, Delphi may be able to operate
smoothly and there will not be any immediate effects on its global
operations because they have $4.5 billion secured in a third party to fund
them. We will just have to wait and see if Delphi will survive. How can
the UAW protect its members in this situation?
One
Million US Employee's Pensions Are in Danger (October 10,2005)
(Article in French)
Financial difficulties of American companies like Delta, Delphi or
Northwest Airlines endanger the payment of one million employees'
pensions. The Federal Agency guaranteeing the payment of those pensions is
already "virtually bankrupt" says Douglas Eliott, president of
the Center on Federal Financial Institutions. Mr. Bush's
Administration and the Republican Party want to wait for mid-term
elections before asking taxpayers to bailout the Pension Benefit Guaranty
Board.
Bills
Trim Teacher Pension Option (September 20, 2005)
Under
today's laws, new Michigan teachers can start buying pension credits for
their retirement as soon as they start work.
This practice allows them retire at an earlier age. New employees'
start off with less salary and therefore paying less for their pension
credits than do experienced teachers. Lawmakers want to prevent teachers
from such credits until they have worked for schools for a minimum 15
years. Kelley Youmans, teaching her first year at Eaton Rapid High School
, believes that teachers are underpaid and wants to buy extra years of
service for her pension by Christmas. At the same time, State Senator
Wayne Kuiper argues that buying early pensions come at a cost to the
school district and taxpayers.
Delta
and Northwest Seek Relief for Pension Plans (September 16, 2005)
As the restructuring of Delta and Northwest airlines begins after their
recent bankruptcy filing, workers are focusing on the status of their
pension plans. Though neither organization is shedding their
responsibilities yet, they both say they reserve the right to due so in
the future. Both companies
support congressional pension reform which would increase the amount of
time available for them to pay for the plans to fourteen years. If pension
reform legislation does not make it onto the agenda this fall, Delta and
Northwest both acknowledge they might default on the federal insurer,
leaving many workers futures in doubt.
AFSCME Tells Congress to Repeal GPO/WEP
(Summer-Fall 2005)
The American Federation of State, County and Municipal Employees (AFSCME)
recently sent their Legislation Director to testify in front of the House
Ways and Means Committee to urge members of Congress to repeal two pension
laws that disadvantage public employee retirees. The Windfall Elimination
Provision (WEP) reduces Social Security payments earned by public
employees and the Government Pension Offset (GPO) scales back survivor and
spouse benefits. 635,000 retired public employees are impacted by the WEP,
while 335,000 retirees have their benefits cut by the GPO. Despite
bi-partisan support, the House Ways and Means subcommittee on Social
Security has blocked legislative action to repeal the WEP and GPO laws.
AFSCME continues to be a strong voice to advocate fair and equitable
treatment of public employee retiree access to pension payments.
Attack on Public Pension Plans (Summer-Fall
2005)
American Federation of State, County and Municipal Employees (AFSCME)
retirees warn state that public pension plans are under assault in a
handful of states that put corporate gain ahead of retirement security.
States, including California, Rhode Island and Alaska want to shift away
from current the Defined Benefit (DB) pension package, towards Defined
Contribution (DC) plans that rely on individual investment accounts. A
conversion to DC pension plans could mean reduced benefits for current
retirees as less money is coming in to fund today's retirement payments
out of the traditional DB plans.
Tensions
Rise as Pensions Fall (August 9, 2005)
More and more companies are abandoning their pensions for less expensive
retirement plans, such as 401(k)s and other defined-benefit plans. The
difference between the two is that pensions offer a fixed income for life
whereas defined benefit plans guarantee no such benefits.
Its benefits are based on how the stock market grows or declines.
One advantage of defined-benefit plans is that with a more mobile work
force, they are easier to carry and move when changing jobs. Pension
plans, on the other hand, are hard to move and great if one is spending
one's entire career with a single company. Part of the reason why pensions
are on the decline is because the financial risks are higher for companies
with traditional pension plans than with defined benefit plans. However,
defined-benefit plans place most of the responsibility for the management
of accounts on the employee who may not be knowledgeable enough to make
wise decisions concerning their investment. This may result in poor
benefits during retirement.
Unions
Threaten to Strike over United Pension Plan (May 13, 2005)
Three unions at United Airlines say they are prepared to strike to protect
their contracts after the carrier, which is operating under bankruptcy
protection, received court permission to terminate four pension plans.
Whatever they decide, the unions face bad strategy choices. Why not
struggle for a national and publicly supported income support and health
care plan?
U.S.
Warns A.F.L.-C.I.O. on Protests About Social Security (May 4, 2005)
The Bush administration has warned the nation's biggest labor federation,
the A.F.L.-C.I.O, that union-run pension funds may be breaking the law in
opposing President Bush's Social Security proposals. But it seems that
this threat will not stop Bill Patterson, head of the A.F.L.-C.I.O's
investment campaign, from opposing Bush's privatization.
Unions
Protest Against Bush's Social Security Proposal (April 1, 2005)
Labor unions have rallied nationwide in a concerted effort to put a stop
to President Bush's Social Security plan. They are flooding congressmen's
meetings, gathering signatures and pressuring firms to stop supporting the
president's proposal. Advocates of the proposed plan charge the unions'
actions as unfair foul play. The unions deny using illegal tactics and are
pressing on in their campaign to denounce President Bush's plan.
Unions
Muffle Wall Street Support of Private Accounts (March 8, 2005)
If President Bush gets his way on Social Security, many experts predict
Wall Street would reap big rewards. But several investment companies are
growing skittish about trumpeting their support. Labor unions that invest
their pension funds with some of the Wall Street firms are furious. The
Wall Streeters gladly take the unions' business but don't support
Union-backed public programs like Social Security. Now some financial
firms are withdrawing their cheers for privatization. Indeed, they fear
that official support of privatization could become a weapon for the
opponent and the stake is too big to take such risks. Hmmm!
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