United Airlines May Default on Pensions

[Bluebear]

More good news for America's workers living in the Bush Years:

CHICAGO (CBS) Cash-strapped United Airlines said in a bankruptcy court filing Thursday that it "likely" will be necessary to terminate and replace its employee pension plans.

The carrier cited the size of further cost cuts and the need to find bankruptcy-exit financing as reasons for such a drastic move.

snip

"We have taken every effort to restructure our business without affecting accrued pension benefits, and will continue to explore every other option," the company said in the 26-page filing. "However, given the magnitude of further cost reductions needed to create a viable business plan and attract exit financing, termination and replacement of all our defined benefit pension plans likely will be required."

But according to a statement by the PBGC, United Airlines' four pension plans — which serve 119,000 workers — are underfunded by $8.3 billion. Because of legal limits, the PBGC can pay only $6.4 billion. Employees would lose the rest.

http://cbsnewyork.com/finance/finance_story_232210049.html

[Erika]

1. Bush Economics Reduce Our Standard of Living

As previously posted, many employees sign on with an employer because one of the benefits is a pension plan. Now they've lost out.

Bush is developing two classes in this country the poor and the elites.

[mike_c]

2. this is yet another reason that corporations cannot be trusted...

...to act in the best interests of anyone but their stockholders, and least of all the wage slaves who toil in their service. Pensions are promises, and if corporations can't be counted upon to keep those promises, the means for welching should be removed, e.g. by paying ALL corporate pension funds into something like Social Security-- a federal administrator that can ONLY legally pay out to the designated recipients and who is mandated to honor the promises made by the corporation. The corporations themselvs should be stripped of ANY further control over pension funds, and also of any further investment benefits.

[Bluebear]

3. "Pensions are promises"

I like that very much. Excellent post, mike.