[jude24]

Also, remember that no company that is bankrupt can afford to pay a pension. And that parts of your pension are paid for by the sweat of the workers who are still working.

I think you fundamentally misunderstand how defined-benefit pension plans work. Defined-benefit pension plans are supposed to be funded as you go, with only limited room for deferred funding. Ford was supposed to - and indeed did -set aside money to invest to pay retiree's pensions. This money doesn't belong to the corporation anymore - it is held in trust for the beneficiaries.

If Ford goes bankrupt, the pension survives. If Ford terminates their pension, only current employees legally will lose their benefits. The retirees may not get all they were promised if Ford can't afford to completely fund their liabilities, but Ford's creditors don't get a claim on the pension funds.

And that is the problem - Ford promised more than they saved up for. That's where the retirees are going to get hit. And it sucks for them, because they negotiated their labor agreements in good faith and lived up to their end of the bargain. It isn't the union's fault that Ford vehicles suck.

[RochesterFan]

I think you fundamentally misunderstand how defined-benefit pension plans work. Defined-benefit pension plans are supposed to be funded as you go, with only limited room for deferred funding. Ford was supposed to - and indeed did -set aside money to invest to pay retiree's pensions. This money doesn't belong to the corporation anymore - it is held in trust for the beneficiaries.

You are correct - to a point. Federal law requires corporations to put aside sufficient funds, when invested at a stated rate of return, that will satisfy the future value of the current cost of the pension obligations. Many of these funds have lost significant value during the recent financial melt down. Several state and municipal funds have claimed to be in this type of difficulty.

One area that your comment ignores is the cost of health care promised in these agreements. Federal law evidently doesn't require these obligations be funded in the same way as direct pension payments. As a dinosaur working for one of the last companies to offer a defined benefit pension plan, I have been told by my employer that health costs for retirees are paid from current earnings. I recall reading that one of or more of the Big Three were paying $1000 per vehicle cost in health care for retirees. As companies cut back, this is getting increasingly nasty.