Tompaine.com
May 31, 2005
The Disappearing Pension
Jonathan Tasini
Jonathan Tasini is president of the Economic Future Group and writes his "Working In America" columns for TomPaine.com on an occasional basis.
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With very little public outcry, we are letting corporate America dismantle the private defined-benefit pension system. At the same time, huge salary and pension benefits are lavished on executives. Remember, pensions are deferred compensation—people put off getting money in their paychecks today because of a promise that they would receive a specific amount of money (hence, the term “defined benefit”) many years later. It’s their money, not the companies’ money. The private pension was a fundamental pillar of the American middle-class dream: If you saved now, you could still have a middle-class life in retirement, and you wouldn’t have to gamble in the stock market to do so.
On occasion, a news story has popped up cluing people in to the crisis. And earlier this month, when a court allowed United Airlines to dump its four employee pensions onto the government —the largest pension-plan default in U.S. corporate history—there was a blip of interest. Soon it was forgotten, except by the 134,000 workers who will lose an average of 25 to 50 percent of the value of their pensions. But where are the voices of a national campaign to confront the looting of peoples’ retirement funds?
The obliteration of the retirement for 134,000 United Airlines workers is a signal to corporate America that union-negotiated pensions are on the chopping block and can be raided, tapped or eliminated for financial gain. Back in the 1980s, when bankrupt LTV Corp. tried to cut retiree benefits, thousands of people took to the streets, and Congress responded, albeit with legislation that simply made the bar a bit higher for corporations trying to cancel pensions. Now, we’re facing a much bigger debacle—and, yet, the streets are calm. But everyone’s pension is now in eminent danger.
Beyond labor, the relative inaction of progressives is baffling. I’d wager that millions of mainstream Americans—self-described as moderate, independents and even social conservatives—could be moved on this issue alone. With progressives obsessing about finding the right message to connect with Americans, I can’t think of a better issue: They are taking your hard-earned money! Rather than hold yet another policy conference to ponder the message, why aren’t there mass demonstrations in front of United Airlines, the PBGC, or the courts that are allowing companies to ditch pensions?
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