On 5/13/05, JDG <[EMAIL PROTECTED]> wrote: > > At 10:29 PM 5/12/2005 -0500, Dan M. wrote: > >> And what happens if the company goes bankrupt? > >> > >The pension fund wasn't owned by the company...it was not considered a > >company asset. The problem was not that the pension obligations went to > >other creditors (the employees were creditors after all). It was that the > >company was able to use vodoo ecconomics to fund the pensions. > > Wow, how surprising. It really all always comes back to bashing > Republicans with you, doesn't it?
Maybe I was trying to find something logical in your rant to respond to and that seems as good a place as any. >From the passage of the Employee Retirement Income Security Act (ERISA) in 1974 up until 2003, more than 160,000 Defined Benefit plans have gone under in the U.S.. 65,000 of these plans failed between 1975 and 1985, most of which occurred in the Reagan period of 1981-85. From 1986 to 2002 another additional 95,000 plans failed, Courts and legislatures throughout the 1990s made 401Ks more attractive with tax breaks and other advantages--as they simultaneously continued to screw traditional group pension plans. According to the Government's Pension Benefit Guarantee Corporation (PBGC), there were 112,000 Defined Benefit pension plans in 1983. Today there are less than 31,000 such plans. Today pension benefits worth $1.5 trillion insured by the PBGC are at risk because the PBGC itself is about to go broke. The Corporate-Government strategy of the last 20 years has succeeded in eliminating so many Defined Benefit plans that too few may exist today to keep the PBGC afloat. The PBGC is not backed by the 'full faith and credit of the US government' and receives no federal tax dollars. The 31,000 pension plans still participating in the PBGC have to pay a fee to the PBGC fund that insures pension payments to workers in the 3200 plans it still supports, or to other pension plans that may also soon go broke. And as the number of plans participating in the PBGC shrinks, the costs get higher for those pension plans remaining. But they can opt out of the PBGC and increasingly have. In 1980 nearly 80% of all defined benefit pension plans participate in the PBGC. By 2000 only 53% participated. In contrast to Social Security, a real crisis does exist for Group Pension Plans today. And Bush's plan here, we predict, will be similar to that for Social Security. First, the current crisis in Defined Benefit Pension Plans will be allowed to worsen further. Indeed, the Bush administration has been passing rules the past two years that won't resolve the crisis but are designed actually to make it worse. For example, its most recent ruling was to allow corporations with Defined Benefit plans in financial trouble to avoid making additional necessary contributions to their funds for two years. Another recent Bush rule prohibits unions from negotiating changes to their plans if they are in financial trouble. And not least, there are the new arbitrary rules concerning 'Cash Balance Plans'. Cash benefit plans are new plans that companies can push that enables them to cash out defined benefits and convert them to the more advantagaeous for the corporations 401Ks. This weakens the remaining defined benefit plans more. Recent rules passed by the Treasury Dept. of the Bush Government have been designed to encourage 'Cash Balance' plans, and thus the shift to 401Ks and the weakening of remaining Union negotiated Defined Benefit Plans. Prediction, Bush will attempt to save defined benefit plans the same way he is trying to save Social Security - legislate it out of existence. He will borrow money to eliminate the PBGC and force the defined benefit plans to be cashed out and converted to 401Ks. -- Gary Denton Easter Lemming Blogs http://elemming.blogspot.com http://elemming2.blogspot.com _______________________________________________ http://www.mccmedia.com/mailman/listinfo/brin-l
