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A second look at pension issues
TweetA second look at pension issues
Recent letters and articles are a continuation of The Vindicator’s efforts to tell the story of the plight of Delphi salaried retirees. It seems to me that there are really two issues that need to be addressed, one being the pensions of those who retired at the normally accepted retirement age of the mid-60s, the other being the pensions of early retirees.
One cannot help but sympathize with those 65 years old and older whose pensions have been reduced by up to 30 percent only because of their bad luck to work for a company that went bankrupt. While a sense of fairness would suggest that full pensions be restored for these retirees, what of the nearly 750,000 other retirees of bankrupt companies, many of whom receive reduced pensions from the Pension Benefit Guarantee Corporation? Isn’t their plight the same? Doesn’t that same sense of fairness ask how financial assistance can be offered to one group but denied others?
In almost every article about this Delphi pension issue, mention is made that some have had pension checks slashed up to 70 percent. What is not mentioned is that age of the retiree is the determining factor used by the PBGC in setting the level of a retiree’s pension. A 70 percent reduction applies almost exclusively to those in their early- to mid-50s. It is difficult to enlist much sympathy for the plight these retirees from the vast majority of taxpayers who must work some 10 to 15 years longer to retire with full pension benefits. The proper governmental response to their plight would seem to be to consider them unemployed and eligible for full unemployment benefits as well as subsidies of COBRA health care costs.
Retirement while still in the early 50s is, unfortunately, still the purview of only the very rich. As much as we would like it to be, retirement for the average worker at 50 or 55 years of age is not sustainable in our economy. Competing in the world economy certainly precludes corporations from paying good, experienced workers who are still in their productive work years to stay at home. Social Security is going broke because the benefits paid to an increasing number of retirees, living increasingly longer lives, are funded by a decreasing number of workers. To maintain the solvency of Social Security it is inevitable that the retirement age be raised, not lowered; the only question is how high.
We need to begin a dialog that addresses the issues of individual, corporate and governmental responsibilities. These should include a establishing a universally recognized retirement age (adjusted for average life expectancy), reviewing the methods used by corporations to fund employee pensions, governmental oversight of those pension plans and a health care plan that provides at least a basic level of care for all Americans, especially those who have lost their jobs.
Robert F. Mollic, Liberty Township
Comments
Concerning "A Second Look at Pension Issues” The author uses the Delphi situation as an example of why the pension and Social Security systems in American may need revised. I agree that conclusion is correct. However, the references in the article are misleading at best. First, many, if not a majority, of the Delphi Retirees were coerced by the company to retire; others were simply given no choice in the matter. Because the "retirements" at Delphi were more or less forced, they are not representative of the country. Furthermore, many developed countries have significantly lower statutory retirement ages than the US does. Singapore, for example, has a statutory retirement age of 55, in China it is 60 for men and 50 for women, in Russia it is 60 for men and 55 for women. The point is it is not just the age, but also the need to generate job openings for younger people, and many other factors including life expectancy and politics that play a role in the age of retirement. Second, while many who were forced into retirement at an age much earlier than they had planned did lose a great deal of what they had earned and been promised by the company for decades, there are also many other factors that caused a wide age-range of people to lose a large portion of their earned pensions. Third, the issue is not really the loss of pension value at all. Many hourly groups had significant reductions in their health care insurance- a part of the compensation they earned. Delphi salaried retirees lost ALL of their health care and life insurance. However, specifically concerning pensions it is the discriminatory and politically motivated decisions that were made when the US Government chose winners and losers in the auto industry bankruptcies. Sworn testimony from Treasury officials have proven that the reason all of the UAW retirees were fully protected was because they were a "politically sensitive group." Evil decisions are made and evil things happen in bankruptcies. Executives protect themselves at the expense of those who depended on and trusted them. Politicians who want to protect their support base deny cronyism, but nonetheless take good care of that base while ignoring or purposely badly treating others not considered so politically important. But when the US Government makes decisions concerning the fate of citizens based on their "commercial necessity" then they have stepped way outside the US Constitution, and have imperiled all of the nearly 90% of the US Workforce that is not represented by any union, and even those who are represented by unions that are not big enough to be considered "politically sensitive." We are happy for the people and the communities that were given guarantees for their pensions by the US Government. They earned them and should receive them if at all possible. The problem is so did the rest of the people affected, but the Obama Administration chose to treat them quite differently. You could be next, if we don't fix this!
InterestedinAll” correctly points out the discrepancies in treatment given Delphi hourly and salaried workers with regards to their pensions. After promising to not interfere in GM decisions, the Obama administration pressured GM to make the union retirees’ pension whole. This was wrong, just as forcing GM to make the salaried employees’ pensions whole would be wrong. The pension and health care promises were made in good faith by both GM and Delphi but became unsustainable because of the evolution of the business climate worldwide. The claims made by “InterestedinAll” about retirement ages in other countries are not germane to the issue. Those are countries with growing economies and low unemployment rates.Programs that would allow people to fully retire after 30 years service would mean that the company and/or the taxpayer would have to support those retirees both financially and with health care insurance conceivably for 30 to 40 years. One need not have a degree in economics to know that would be financially ruinous. As the writer stated, many were forced into retirement against their will. This bolsters the case for them to be treated as unemployed workers
All I ever hear is how people working in the private sector should just suck it up and move on..while most Federal, State and local workers receive "Cadillac" pension & health care benefits at early retirement ages. Didn't our DC politicians just decide to take billions of our tax dollars to bailout states yet again because they cannot afford these plans? So those of us who loose our promised private sector benefits and look for new jobs are then forced to pay taxes to save pensions for those who work for the government. That feels like taxation by hostile representation.
Yeah DJ...you are correct that our politicians have adopted policies that encourage export of private sector jobs...so who is going to pay for your pension..the Chinese?