you need to stay vigilant and heed what this disturbing series of articles says.
These are quotes from Youtube and "US New and World Report", "The Daily Ticker" et al. and are very disturbing to working folks all over.
See links and quote below:
http://money.usnews.com/money/blogs/pla ... ment-heist
http://finance.yahoo.com/blogs/daily-ti ... 51510.html
Traditional Pensions are Casualties of a Retirement Heist
September 15, 2011 RSS Feed Print Companies often say they are freezing their traditional pension plans and eliminating retiree medical benefits to remain competitive with pension-less employers overseas and cope with an aging workforce and stock market losses. But in a shocking new book, Retirement Heist: How Companies Plunder and Profit from the Nest Eggs of American Workers, Wall Street Journal reporter Ellen Schultz explains that pension cuts are actually an accounting maneuver that is being used to boost corporate earnings. The massive retirement liabilities that many companies report are actually caused by unfunded executive pensions and deferred compensation plans, not the pension obligations to ordinary employees, she found. U.S. News asked Schultz to explain why traditional pension plans are really being frozen. Excerpts:
[See 7 Reasons You Don't Have a Pension.]
Why do profitable companies freeze their pension plans or close them to new workers? The retirement crisis was not an accident. The retirement crisis was caused by actions of the companies. They had incredibly overfunded plans and chose to cut benefits and ultimately freeze the plans, even though there was plenty of money in them to pay the benefits. Initially people didn’t understand that the benefits were being cut because companies hid it.
How is pension plan accounting used to boost shareholder value? Cutting the benefits actually gives companies a boost to profits. It’s an accounting effect. If you promise to pay $100 million to retirees, that’s a debt on the books. If you cancel that debt, then you get to keep the profit. Freezing the plan not only let them keep the money in the plan, but gave them a boost to profits.
[See Jobs That Still Offer Traditional Pensions.]
Do companies need to cut retirement benefits to stay competitive? When companies began cutting benefits it wasn’t to remain competitive because the plans had a huge surplus and there was no cost to the company. What they were doing is taking the plan and finding a way to convert some of the assets into a benefit for the company and also to boost their profits. It’s not accurate for them to say they had to do this to remain competitive.
How are pension plans for ordinary workers and executive compensation related? People have to realize that when companies say their costs are spiraling, maybe it’s the executive’s costs that are spiraling. In many cases the additional pension costs and boost in liability are just because of the executive pensions. The plans for regular workers are tax advantaged and subsidized by taxpayers. If you offer a pension plan, it is supposed to be for everyone more or less. Plans for executives don’t get special tax breaks, but companies have found ways of trying to get the same tax breaks as the plan for regular employees and have found strategies to get money from the regular plan to pay executives. They have been cutting the benefits for the rank and file employees and boosting the pay for the executives.
[See 21 Workplace Benefits That Are Rapidly Disappearing.]
If your company has promised you a pension and retiree health benefits, should you count on getting them in retirement? If you do have a pension, companies can cut it going forward, but they cannot take away something you have already earned. Under law that is protected. You also have to be able to recognize that your pension is being cut because it’s easy to present the information in a way that looks as if nothing has changed. You cannot count on a pension being retained going forward. If you’ve been promised retiree medical, in most cases the promises are not enforceable unless you are in a union. A lot of companies will say they will let you continue your health coverage until you are eligible for Medicare, but then later say they can’t afford that and are going to need to charge you a whole lot more than they did. The people who are better protected are those who are in a union and are in a collectively bargained agreement. You really have to be self-reliant. If your company has a pension or retiree medical, you really cannot bet the farm on that. These are things that are under assault and companies are trying to take them away.
