"These are bad times to get old." United Airlines seen as bellwether

[Bluebear]

http://www.signonsandiego.com/news/business/20050514-9999-1b14pension.html

Jerry Schuck and Tom Close never thought they were gambling with their retirement. But after a federal bankruptcy judge allowed United Airlines to terminate four pension plans last week, retirement for the former United pilots is looking like the aftermath of a disastrous stay in Las Vegas.

Schuck, 60, expects to lose 80 percent to 85 percent of his retirement benefits as a result of the ruling, which shifts responsibility for Schuck's pension to a government agency. The Carlsbad resident was flying mostly Boeing 777s from Los Angeles to London when he retired in October after working 26 years for United....

"I would say, yes, retirement in general looks a lot less secure today," said Olivia S. Mitchell, executive director of the Pension Research Council and a business professor at the Wharton School of the University of Pennsylvania. "My advice to my students is don't quit working. . . . These are bad times to get old."...

As Conger sees it, the public pensions established for government employees and teachers are only about 10 years behind the problems that private pension plans like United's are experiencing today.

[recidivist]

1. Pretty good argument for fully funded pension systems.

"As Conger sees it, the public pensions established for government employees and teachers are only about 10 years behind the problems that private pension plans like United's are experiencing today."

Exactly.

So whaddya wanna do? Promise yourself the sun, moon, and stars today, and kick the can to the next generation to pay for it? Or sock your retirement savings away in an investment account?

There is absolutely no reason our children should tax themselves up to the eyeballs to pay for our retirements. At some point, they will tell us to take a hike. We need to be saving for our own retirements.

Defined contribution plans are becoming the norm in the private sector for precisely this reason. What we have in the United situation -- and perhaps down the road at GM and/or Ford -- is just the death of another dinosaur that refused to adapt.

[sweetheart]

2. All pensions should be public

The public is the insurer of last resort, and each individual should
have their own retirement pension at the bank of the united states.

If these "engineers" want to keep making labour more and more flexible
in a whirlwind storm of creative destruction, then they must provide
a mechanism to shift the pension liabilities to the immovable firmament.

This behaviour of dumping money earned is outrageous and will be the
preferred vehicle for corporations of the next 30 years to clean up
their balance sheets... dumping it back on the public purse, money
already earned by their staff. It is really pathetic, but how else are
the flexible labour force who work in so many jobs over a lifetime ever
gonna come back to the point they should be at.... with a bloody
decent pension given all the work?

[recidivist]

3. There is a perfectly sensible way to guarantee pension security.

Shift to defined contribution plans, and let the employees own them. When everyone has a 401(k), IRA, or a similar account in Social Security, pensions will be fully portable. And secure.

Shifting pension obligations to the public sector is not a solution. Social Security benefits have been cut several times before, and they will be again. Public sector pensions are dependent on the willingness of future generations to pay for them.

Retirees are now, on average, a relatively affluent demographic group. There is no reason relatively poorer young people should pay high taxes to support retirees in relative affluence. Public pensions, including Social Security, will end up being means tested. Better to structure pensions around private accounts from the beginning.

[sweetheart]

6. Ok, i can agree with that

Now that you mention social security, it was not what i had in mind,
more exactly what you said... just let the employees have a funded
pension that is not attached to the business. There must be some legal
structure, much as with 401(k)'s... so that is what i was thinking
of as public.. and certainly not having future generations pay for
the lives of current retirement.

I've not spent time worrying about this issue, and just have a feeling
that justice can't be to have corporations ruling over what effectively
belong to the staff... and whatever preserves the employee's property
rights over their own retirements, i support.

[oneighty]

9. Are you retired now?

Do you have total confidence that your 'Investments' will pay off as you are planning?

I have some annuities that at one time I wished I had invested everything in including social security.

Boy what a mistake that would have been.

Will you be able to support your (Poor) aging parents if their income disappears? Will your children be able to support you if your income disappears?

Note. I use you and yours, but this relates to all of us. Nothing personal intended.

180

[rfkrfk]

4. United is employee owned.

or something like that.
Stop bitching.

perhaps the pensions could be funded by selling off
--> highly valueable United stock <--.

[Toots]

7. I don't think so... United is public and has stock on the market

Or were you being sarcastic?

[rfkrfk]

11. from '95 till '00 or so, United was employee owned

not sure what happened since.
perhaps someone could provide a summary.
I guess that pilot influence would continue, after '00.

by employeee owned, I mean,
employee-majority board of directors,
stock still publicly trades.

[tabasco]

8. United Airlines is a public corporation.

What are you talking about?

[Deja Q]

5. These are bad times to live in.

But I pity the old.

But should I have sympathy for those who voted for * and his ilk, who are happy to see workers lose their pensions and livelihoods and means to live?

Retirement looks less secure.

Where I work at, people are feeling insecure.

Where you work at, people are feeling insecure.

It creates an unhealthy tension and it's only going to get worse until people realize that their jobs may shortly be gone; replacements not nearly as plentiful and at far lower salaries.

This is life. Life is what we make of it. We're either indolent and too scared to lose what we already know we're going to lose within years or months or we're in power being greedy and hurtful. That is our modus operandi.

And I choose to be indolent. Enjoy life while we can, because it's going to change by 2006~2007, so don't feel shocked.

[Bozita]

10. Parachute color is part of the problem -- toon

Actually, the mere existence of those parachutes makes any solution near impossible.