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Trade Unions
and
Pension Issues
- Archives 2006 -
Also see our site on
Private
Pension Issues, Social Security and
World Pension Issues
States
Struggle to Cover Retirees (December 18, 2006)
Though public employers
promised medical coverage to 25 million current and future retired state
and local civil servants, state and local governments are struggling to
meet this obligation. Forty-three state legislatures meet next month
to discuss benefit reductions, savings for future costs and the possible
shift of expenses to the federal Medicare program. However as state
and local government attempt to shed retiree medical costs, Medicare is
already in a difficult financial situation. The government's audited
financial statement recently reported that Medicare's unfunded liability
rose $2.4 trillion in 2006 to $32.3 trillion.
The
Retirement Lies We Tell Ourselves (December 11, 2006)
Developing a successful retirement plan involves a multitude of
factors that must be considered. Though many assume they can rely on
the equity of their home, a pension, an inheritance or plan to work into
their retirement years, a reality check on these kinds of assumptions may
be in order. "We're not exactly a nation of savers," says Rande
Spiegelman, vice president-financial planning at the
Schwab
Center
for Investment Research, a division of Charles Schwab Corp. Thus, "we
are in denial, to a certain extent, about retirement planning," Mr.
Spiegelman says. "Maybe we need a reality check."
Workers
Rally on Tax Relief in
New Jersey
(December 12, 2006)
At the New Jersey State House, approximately 10,000 teachers,
state employees, firefighters and other workers rallied to denounce the
Legislature’s attempts to overhaul the system for pension and health
benefits. “We are not going to sit back and take this disrespect,”
said Barbara Keshishian, vice president of the New Jersey Education
Association, which represents teachers. “We keep this state running, and
let me tell you, if we have to, we can shut it down.” Possible decreases
in pensions and health benefits have unions concerned, especially since
New Jersey
's current property taxes are among the highest in the nation.
The Ticking Time Bomb in State Pensions
(November 28, 2006)
Even though President Bush recently signed into law the Pension Protective
Act of 2006 to strengthen the financial health of corporate defined
benefit pension plans, state government pension plans are in dire
financial straits. Despite a $1.3 trillion shortfall, little attention has
been paid to state government pension plans and the retirement sector. The
under-funding of public pension plans may soon set off a national crisis.
N.J.
Pension Formula Forgot Retirees are Living Longer (October 19, 2006)
Underestimating life expectancy rates have contributed to
New Jersey
’s current pension-system problems. Every three years, experts revisit
the assumptions about pay, longevity, length of employment and other
elements that go into the formula used to calculate the amount the pension
funds needed each year for long-term benefit payments. Given the
inaccurate projections, lawmakers now struggle to rein in the cost of
public employee retirement benefits. A recently released report claims
that
New Jersey
's price tag for pensions will balloon by nearly $100 million next year.
Goodyear Retirees Rally to Maintain Retirement Benefits (October 17, 2006)
Retirees have stood along side current workers as talks between officials
and union representatives take place on maintaining retiree pension
benefits. "To Goodyear we're just a number. We bailed them out in
2003 and it seems like they have a short memory," says retiree
Charles Jones, who worked 37 years at the plant. Retiree Sylvester
Robinson adds, "At least give us respect for all those years we put
in and made Goodyear a multi-million dollar company--over the 30 something
years I was involved I know."
Pension
Tacking Gives the Politically Connected a Big Edge (October 18, 2006)
For
years, public employees such as attorneys and municipal court judges held
multiple jobs and made combined incomes well into the six-figure range.
Upon retiring, their pension benefits have traditionally been computed on
the total earned per year from all their public posts. This retirement
package system, also known as pension tacking, has suddenly stirred
diverging opinions and legislative scrutiny. Some view these multiple
tacked-on pensions as a potential source of savings for government and the
taxpayers. Why should one person holding eight different public
posts be permitted to collect a pension based on all eight jobs rather
than just one? New Jersey State Sen. William Gormley, R-Atlantic, has
taken the lead in focusing attention on the practice and has offered a
direct solution: One person, one pension.
Remington Freezing Pension Plans for
Non-Union Employees (October 11, 2006)
Yet another company plans to freeze pension plans starting January 2008.
The Remington Arms pension will no longer increase benefit payments in
hopes of improving its cash reserves. Currently, the decision only affects
management employees. Pension negotiations with unionized employees will
begin in June 2007.
Women Finding it Harder to Afford
Retirement (October 11, 2006)
“The boomer women who are turning 60 are not prepared for
retirement. They haven’t saved enough. They don’t have the retirement
income from pensions,” says Cindy Hounsell from the Women’s Institute
for a Secure Retirement. Minimal savings, insufficient amounts in pensions
and Social Security contribute to reduced retirement income. Thus, an
increasing number of baby boomer women plan to work past 65 because they
simply cannot afford to retire. Since women statistically live longer and
earn less, the number of working women over 65 has increased almost 40%
since 1980.
Bush’s War On Unions (October 11, 2006)
Healthcare industry workers will face grim repercussions given the
National Labor Relations Board’s recent changes in defining supervisory
status. Through the
NLRB’s new definition, employers are invited to classify nurses who
oversee other nurses or technicians as supervisors. Though they are not
able to hire or fire workers, given this new classification, they are
stripped of union rights under the labor law. Therefore, millions of
nurses lose the right to be represented by labor unions and collectively
bargain for better wages, pension benefits and safer working conditions.
As Religious Programs Expand, Disputes Rise Over Tax Breaks (October 10,
2006)
Tax exemptions are generally given to religious programs to assist with
their charitable work in serving others. However, members of the St.
Joseph County
Property Tax Assessment Board of Appeals are disputing current
property tax breaks given to residents who live in the Holy Cross Village
retirement community. Their argument stems from the fact that residents
living in non-religious affiliated retirement communities pay thousands of
dollars in property taxes each year. The Brothers of Holy Cross, a Roman
Catholic religious order, have taken this matter to court since they
believe they are simply providing the elderly with amenities that give a
sense of security, social opportunities and services to make independent
living easier. The Board refutes this claim since residents of Holy Cross
Village have a reported average net worth of $1 million. “To them, a
charitable ministry does not consist of providing lovely retirement living
to affluent people.”
Pension Fund Tallies Losses and Rethinks Its Strategy (September 20, 2006)
Last April,
San Diego
County
’s pension fund was named Public Plan of the Year by a money management
publication due to its supposedly winning strategy of investing retirement
money of about 33,000 county workers into hedge funds. However, Amaranth
Advisors, one of the partnerships, recently announced that it has suffered
huge losses in natural gas trading. What
does this mean for county retirees’ pensions?
Dan McAllister, the
San Diego
County
treasurer, states that he still does not know if the loss is an isolated
situation or just the tip of the iceberg.
Given the city’s current pension funding scandal, promises made
to the county retirees are being grossly exploited in exchange for major
risky investments that only benefit hedge fund managers.
Inheriting 401(k) Gets More Tax Friendly for People other than Spouses
(September 19, 2006)
Starting next year, non-spouses will be able to transfer an inherited
401(k) to an individual retirement account. Prior to this reform, children
and unmarried partners had to pay huge federal and state taxes on the
entire balance and often were left with only one-third of the original
inheritance. Human Rights
Campaign and gay rights group lobbyists have waited a long time for these
changes. Some believe that
the Sept.11 terrorist attacks may have provided some momentum for the
reform since children and other survivors were forced to pay large tax
bills on 401 (k) plans inherited from those who died. The article contains
important guidelines on how to handle an inherited 401 (k).
Public ‘Safety Net,’ or ‘A Charade’? Prop. B Puts Pension Crisis
on Nov. Ballot
(September 18, 2006)
Since the public became aware of
San Diego
’s $1.43 billion retirement fund deficit, local officials have developed
proposals to improve the city’s financial practices.
Among them, Proposition B has caused a stir amongst city officials
and union representatives. If
passed, proposed increases in pension benefits of city employees or
elected officials would require a public majority vote.
According to Mayor Sanders, “taking direct public input on
pension increases would make city officials and union representatives
fully explain why benefits increases were necessary – and more
importantly, where the funding would come from.” Union officials
speculate that passage of the measure would decrease employee retention
levels as well as discourage talented workers from city jobs since wages
and benefits could become less competitive.
Retirees Get Albany
Attention, and New York City Gets the Bill (August 22, 2006)
Over a period of six years, Governor Pataki and the NY Legislature
approved billions of dollars in new pension benefits for city workers. At
a time when private businesses are eliminating pension plans, some city
workers received significant increases in pension benefits, bonus checks
and given earlier retirement with full benefits, particularly those
working in hazardous or dangerous jobs. Despite opposition by city and
state comptrollers and the governor’s own budget division, these
increased benefits will cost the city $60 million and could go up even
more.
Costly Promises New York Gets Sobering Look at Its Pensions (August 20,
2006)
In recent years, politicians have generously approved pension enhancements
based on financially sound calculations. However, the city’s chief
actuary, Robert C. North and outside experts question these numbers. They
argue that these calculations, which continue to be used as justification,
are in fact flawed and provide a misleading picture of the pension
plans’ real financial situation. Analysts claim that the financial gap
could be as wide as $49 billion and in turn may mean empty future promises
to city employees, major tax increases and budget cuts in the near future.
The Other Pension Crisis (August 18, 2006)
Last week, former SEC Chairman Arthur Levitt unveiled the report on
the City of San Diego’s pension-fund scandal.
Unfunded pension liabilities for civic workers have grown to $1.4
billion due to mismanagement and the denial of their actual financial
situation. According to a study done by Wilshire Consulting, experts
estimate that over 80% of public pension plans are currently underfunded.
The short-changing of pension contributions and the over-promising
of benefits to public employees emphasize the need to review the funding
mechanism to prevent a large-scale pension disaster.
Public Pension Plans Face Billions in Shortages (August 8, 2006)
The city of San Diego retirement system has a $1.4 billion deficit as the
result of improprieties in the city’s contributions to its employee
pension fund in 2003, preventing retirees from receiving a portion of
their benefits. Concerned about a potential crisis in the retirement
system and necessity of management system modifications in the future, the
city administration expects a report on the causes of the shortfall.
US Plan to Help Retired Pilots Unlikely to Fly
(July 12, 2006)
Discussion of legislation to stabilize pensions has included a plan to
increase benefits for retired pilots of US airlines. However, staffers
report that lawmakers will likely omit it in the final bill, which will
affect 44 million American pensioners. Support for pilots stems from their
unfair treatment; pilots must wait 5 years after retirement to receive
maximum benefits from the federal pension agency. The opposition cites the
extreme cost over the next 10 years, a problem for the agency already in
deficit.
Unions Set Pacts at a Slower Pace As Clout
Wanes, Employers Resist (July 5, 2006)
Union organizing contracts now meet greater resistance from companies,
slowing the process and discouraging members. Not only does it take
longer; contract agreements succeed less often. With rising medical costs
and pension concerns, companies grow increasingly wary about health care
and pensions benefits, which are top union priorities. Unions question
companies’ good faith bargaining, and look to protection under the law.
Parts Supplier Reaches Buyout Deal with United Automobile Workers (June
10, 2006)
Delphi Corporation, which filed for bankruptcy protection at the end of
last year, has been trying to impose drastic wage and job cuts since then.
Last month, workers of Delphi, the biggest auto parts supplier in the US,
agreed to give leaders of the United Automobile Workers (UAW) the power to
call for a strike. As a result, negotiations have been strong and last
Friday, Delphi's chief executive, Robert S. Miller, agreed on a plan that
offers buyouts to all of Delphi 24,000 workers. Claudia Piccinin, a Delphi
spokeswoman, said the plan "allows us to more rapidly transform our
U.S. manufacturing operations and also softens the economic impact on our
hourly work force."
Privatization Revived in 2007 Budget (February 16, 2006)
All of us interested in the US 2007 budget are scrutinizing the
Administration's proposal for social programs, including Social Security.
Mainly we focus on two main areas: privatization of Social Security and
the promised savings of approximately $6.3 billion over a ten year span.
So far, the proposed solutions will only hurt the people that need these
benefits. Why not focus on ways to improve and make the program stronger
to meet citizens' needs, says the Century Foundation writer.
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