What About Pensions?
Several of our NCRO members have expressed concern over the future of pensions, more formally known as defined benefit pension plans. Be aware that the NCRO Board is also concerned and is taking action to defend, protect, and preserve pensions.
Chrysler salaried retirees were fortunate to have their pension assets transferred to the “new Chrysler.” This ensured that our pensions would continue to be managed and funded by Chrysler, at least for the near term. The reason our pensions were transferred to the “new Chrysler” is due in large part to the actions of the NCRO to petition the Automotive Task Force, and our preparedness in foreseeing a Chrysler bankruptcy.
This does not mean that we are resting on our laurels. We recognize that business is volatile and competitive and that our pension assets could be under jeopardy again someday. As a result we have joined forces with the NRLN, the National Retirees Legislative Network, to lobby for pension and income protection. NCRO has two of its Directors sitting on the Board of the NRLN. We influence their processes and policies to protect pensions. We work with other retiree organizations to petition Congress to write laws to protect our rights and income. Most recently American Airlines and Kodak have declared bankruptcy threatening the pensions of their retirees. NRLN went to the Judiciary Committee Staff this week to voice objection to termination of their pension plans, which would turn them over to the PBGC resulting in the possible loss of benefits for some of their retirees.
Two of NCRO’s Directors, Chris Dyrda and Stan Hurst, were in Washington on October 2nd and 3rd talking to the staffs of Senator Carl Levin and Senator Debbie Stabenow, meeting with American Airlines and Kodak people to discuss strategies, and formulating long range plans. Senators Stabenow and Levin are familiar with the NCRO and NLRN, and their staffs have advised us on things we can do to raise awareness of pension issues.
Additionally, the NRLN has formed an Income Security Committee for retirees, which includes participation by three of the NCRO Directors. This Committee will formulate strategies and position papers to take to Congress on behalf of retirees.
Pensions are under attack by creditors, corporations, and the PBGC. When companies declare bankruptcy pensions are considered unsecured claims. Creditors claim the bulk of assets in bankruptcy leaving little or nothing to help underfunded pensions. In fact, most bankruptcy courts won’t even give retirees a voice in court. Worse, most bankruptcies are litigated in New York, a district sympathetic to corporate interests. Then there is the issue of corporations using pension funds to accomplish reorganization, by offering buy-outs and lump sum payments. Lump sums payments, like those offered by GM and Ford, often underestimate what retirees are entitled to get, and leave retirees to fend for themselves in how they will invest those funds for a steady income stream. Finally, when pension plans are terminated in bankruptcy the PBGC assumes payments and assets, and resulting in reduced pension payments to many retirees, especially the early retirees.
Many companies have eliminated defined benefit pension plans. Some people think that contributory plans like 401k’s can replace pensions. We disagree. 401k plans often lack employee participation, and company matching funds. So what happens to our children and grandchildren in retirement? Most retirees are unprepared to achieve financial stability in retirement. Senator Harkin has come up with a plan for the future, the USA plan that would make pensions portable and universal, not subject to the whims of any one company. See the attached press release:
This may be an answer, but the wheels of progress in Congress turn slow. Only substantial grass root efforts can stimulate Congress to act.
We need all retirees to help. Write your legislators and express your concern. Write your newspapers and express your opinions on these matters. Respond to Capwiz action alerts when you get them from NRLN. Congress does take note of the number of responses. Contribute to the NCRO and NRLN so we can protect and advance income protection for retirees.
The Directors of the NCRO are trying to get justice for retirees, but we need everyone who is concerned, or affected, to help.