Posted on 06/15/2005 2:03:52 PM PDT by CHARLITE
Employees of United Airlines recently got a frightening lesson in the “ownership society.” The lesson was: If you don’t own and control your retirement assets, they can be slashed or taken away at any time.
A federal bankruptcy judge approved United’s request to dump its pension plan into the Pension Benefit Guarantee Corp., a federal agency that takes over insolvent retirement plans. More than 120,000 United employees and former employees — including many who are already retired — will see major cuts in their retirement benefits.
For decades, United has promised its workers generous payments in retirement. As other industries moved workers to 401(k) plans and other investment accounts, the airline industry kept a firm grip on the money in its pensions, assuring workers that they could trust their employers to fund their retirement.
While workers at firms across the country squirreled money into their own accounts and pored over their investment statements each month, United’s pilots, flight attendants and mechanics rested secure in the belief that the company was handling all of that for them and would be there for them in retirement.
United’s bankruptcy is a rude awakening. What once seemed a secure and risk-free retirement plan is now revealed to be neither. United’s employees and retirees now face cuts of 60 percent or more in their monthly retirement checks.
(Excerpt) Read more at foxnews.com ...
The individual workers not the unions.
Employees get run over by the company, and if not the company, the union, and if not the union, the government. Solution: Work for yourself it at all possible.
I think before the corporate retirement fund scandal story is finished, the unions will have done a much better job of managing pensions than the corporations.
And even if you have to work for someone else, be sure to salt something away for a rainy day. And remember Will Rogers' warning: "I'm more worried about the return OF my investment than the return ON my investment."
LOL, but true.
No screwing around with insurance brokers pretending to be investment advisors. No semi-annual reports. No fighting to get the idiots at the investment company to offer a low-load S&P 500 fund instead of their high load "growth" fund.
Employees at our company were given an option of a new defined contribution plan with a cash payout and staying with the old defined payment plan. Most chose to stay with the defined payment plan..because it was maybe higher..
I will take my money and run in a few months.
It should have been the lesson of the railroads and then of big steel. We must be very dumb in our legislative mantality.
Mentality. Glaring error that. Late-afternoon sun glare on my monitor.
I wish NY would move to a 401K type plan.The current defined benefit plan is bankrupting local municipalities and school districts.
And you know exactly the same could be said for Social Security.
I equate this to the Federal Government and the Social Security mess. It is my money, 14.2% (7.1% from me, 7.1% from my employer) of my pay goes into the Social Security system every two weeks, of which, I may, and emphasis may see a small portion of it some day. This is the government's way of redistributing the wealth.
My philosophy...let me direct where my money goes and how I invest it for retirement in a private account. I am smarter than any government bureaucrat.
I like the previous poster's comment regarding his Schwab account. I don't like to limited in what I can invest my money in...maybe it should be limited by the SS Administration as there are a lot of idiots out there that need to be protected from themselves, but my Defined Contribution Plan...let me choose. I too would choose a DC plan as I generally can invest better and have plenty of money that would exceed the projections of any actuary.
I was at a summer job where they were offering the employees the same buy-out option. I told them it depended on how long they planned on living after they retired what they should choose. Too many of them took the buy-out and invested it in bass boats and RV's.
Why is there a law that the American Public has to take over these pension plans that go bankrupt, unless it is to distribute the last of the assets?
I hope the tax dollar isn't being used to continue and fund these pensions, that would be a crime.
I was at a summer job where they were offering the employees the same buy-out option. I told them it depended on how long they planned on living after they retired what they should choose. Too many of them took the buy-out and invested it in bass boats and RV's.
It did not end happily; the Feds put in a trustee to watch over the plan, X number of Teamster official got a stay at the well-known graybar hotel, and $Y millions of pension dollars were gone forever.
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