Thursday, June 08, 2006
Breaking Your Piggy Bank
Corporations have moved progressively away from pensions simply because the laws will allow them to do so, promoting 401(k) plans instead. They see 401(k) plans as the way to go because they are not legally obligated to contribute, you take all the risk, and they can always cajole you into buying shares of their stock even if the value of that stock is worthless. Congress has wholeheartedly approved this mass flight from corporate responsibility. In fact, it has consistently abetted corporations in their efforts to force pensions, and other benefits, into extinction. Legislators have re-drafted pension rules to encourage the underfunding of retirement plans, and have enacted bankruptcy laws to allow corporations to suspend health insurance and other benefits to their former employees. The Employee Retirement Security Act (ERISA) was passed in 1974 to prevent corporate executives, accountants and lawyers from using your pension as a source of cash - a scenario comparable to a stingy daddy robbing his own kid's piggy bank. The spirit of that act has utterly vanished in Congress, and a pension reform bill has been introduced to remove what restrictions remain to protect retirement plans from such predatory conflicts of interest. That's not all. The new bill would also bar unions from renegotiating pension agreements at the bargaining table, while enabling employers to "freeze" an employee's pension, not allowing further amounts to accumulate.
"Ripping off retirement: the big pension swindle" from Newsday