boycott united forever

On Thu, 12 May 2005 19:04:40 GMT, "Jay Honeck"
wrote:

Not to diminish what has happened at United, but it was reported on NPR that
United pensioners are guaranteed their pensions, up to $45K annually.

The guarantee of course is by the American taxpayer. (Speaking of the
nation, not the airline.)

I have little sympathy for airline employees, who in the good days set
the airlines up for future bankruptcy much as the United Auto Workers
did. (To be sure, the airlines and the auto mfgrs were enablers.)

Who in his right mind believed that generations of workers could
retire at 60 with $50/$60/$70K annual pensions and medical benefits
for the next twenty or thirty years?

The pension overhang guaranteed by the PBGB (whatever the order of the
letters: PGBB?) is half again as large as the savings & loan bailout
that wrecked the economy in the 1980s.

-- all the best, Dan Ford

email (put Cubdriver in subject line)

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Grumman-581 wrote:
"gatt" wrote in message ...
The best way to solve this problem would be to take the CEO, shoot him
through the head and hang his corpse from a Wall Street lamp post so that
every other executive out there remembers, for example, why the french still
celebrate Bastille Day. But we can't do that.

Who says you can't? Feel free... I won't tell...


I believe the CEO is at the crux of the problem and therefore leads to a
possible solution. You don't need to shoot him. What you need to do is require
any company that contemplates a federal buyout of its pension problems to limit
management renumeration to 10 times that of their average worker... in keeping
with what typical Japanese CEOs earn, even of the largest corporations. The
days of screwing the workers and taxpayers while management continues to rake in
millions has to end.

If they want to have the workers and taxpayers take a hit, EVERYONE should feel
the pain. When management's wallets are being affected, you can be sure they'll
look for better ways to manage their pension funds.




--
Mortimer Schnerd, RN

VE

Mike Rapoport wrote:
It isn't supposed to require either a leap of faith or the company remaining
in business. The Company is suppose to deposit money to fund the pension
plan which is a trust with an independent board. The funds are
professionally managed and, barring catastrophe, there should be enough to
pay the promised benefits.

One could make the same argument that Social Security is supposed to be just that:
"professionally managed and, barring catastrophe, there should be enough to
pay the promised benefits." But even that is no longer sacrosanct.

The only real solution to all of this is for people to take charge of their
own retirement via their own personal accounts that they themselves manage.
When you delegate this responsibility to some other party you do so at your own risk.

George Patterson wrote:
*You* try finding a decent job when you're in your 50s. No, they won't
discriminate on age, they'll just tell you they're looking for someone
with less experience.


Exactly. Many of these people who 'thought' they were going to enjoy a decent
retirement with their pension plans will need to go back to work (or work for
another 15 years). They will find they are competing with a new class of laborer,
resently arrived from another country willing to work for a wage suprisingly
lower than they expected to make (if they can get hired at all).

On Fri, 13 May 2005 03:42:19 GMT, StellaStarr
wrote:

You seem to think a pension is some kind of welfare.
It's money you arranged to have taken out of your paycheck, to save up
for retirement.

Not the United pensions, which are "defined benefit".

You are speaking of "defined contribution" plans, which are owned by
the worker and can be taken from job to job.

Sort of like what the prezdint is proposing for Social Security, and
that puts the Good People into conniption fits because it breaks the
bond between welfare-receiving taxpayer and welfare-giving politician.

If you don't have a vested, defined-contribution plan, then you don't
have a pension plan. All you have is a promise. And we are beginning
to see what promises are worth, whether from an airline or from a
guvmint.


-- all the best, Dan Ford

email (put Cubdriver in subject line)

Warbird's Forum: www.warbirdforum.com
Piper Cub Forum: www.pipercubforum.com
the blog: www.danford.net
In Search of Lost Time: www.readingproust.com

It's the Pension Benefit Guaranty Corporation and it is still
technically not taxpayer-funded. All employers with defined benefit
plans pay insurance premiums that in theory will cover the cost of
bailouts, assuming that not too many are needed. UAL does not yet break
the bank but it comes close. Then, as with the S&L crisis, Congress
will end up authorizing a payout from the General Fund.

This is a class-A debacle because every option si in a sense bad. The
judge in the case basically said, better to have the company stay in
business and pay *some* obligations than go bust and pay none. If UAL
were to be liquidated it would be quite a foodfight. Would today's
retirees do better that way? Highly unlikely. It's crazy to think so.
So keeping UAL going is in one sense better for all UAL people.

However, by allowing UAL to do this, the court has created a major
moral hazard with regards to Delta and American, whose pensions are
just as expensive. Basically the gov't says to your competitor, "Oh,
that huge expense you were required by law to take? We'll let you take
a mulligan on it." Delta et. al. now have a very legitimate claim that
UAL is being given a very unfair advantage against them, and will over
the next few years likely end up weaseling out of their pensions too.

This is why I ultimately come down against it. Liquidating UAL would
really be in the best interests of the broader market (partly by
getting rid of UAL's inventory, thereby allowing prices to rise a
little) but in the short term this is like chemotherapy. Sure, maybe it
kills the cancer, but in the meantime you wonder whether you weren't
better off dead.

I've read btw that GM's cost of providing benefits to retirees comes
out to something like $15k per current employee annually. If that isn't
a drag on wages I don't know what is. If any of you are WSJ subscribers
there's a good article on it he
http://online.wsj.com/article/0,,SB1...Business+World.
The whole concept of society paying for individuals' retirement turns
out to be a bust. It worked as long as it did in the US and Europe
becuase of strong post-WWII economic growth. The US baby boom gave us a
demographic bubble that could sustain the concept for one generation
more than in Europe but it is just as doomed here. It's a nice idea in
principle but in practice it wrecks both companies and economies
leaving everyone but a lucky older generation that got there first
worse off.

-cwk.

"George Patterson" wrote in message
news:T0Wge.4970$1f5.1194@trndny01...
Mike Rapoport wrote:

It isn't supposed to require either a leap of faith or the company
remaining in business. The Company is suppose to deposit money to fund
the pension plan which is a trust with an independent board. The funds
are professionally managed and, barring catastrophe, there should be
enough to pay the promised benefits.

The problem is that the funds are typically invested in stocks and/or
bonds. If the market is doing well, the employer only has to contribute
money for relatively new employees -- employees who have been there a
while already have substantial funds, and the returns on that provide the
necessary increase. If, however, the market isn't doing well, the company
has to make continuing deposits, usually at a time in which they aren't
making very much themselves.

My former employer is typical in this regard. In early 2001, the market
was still cooking, and my former employer had the pension funds in stocks.
As the market collapsed later in the year, there was a rush to shift
everything to bonds. Then came the ENRON scandal. Congress reacted to that
by increasing the amount of equity employers had to keep in their pension
plans. That meant that companies that had pension plans suddenly had to
scrape up substantial amounts of cash to add to them at a time that the
market was forcing them to divert more and more of their income to the
plans anyway.

My company reacted in two ways. First, they laid off anyone who was close
to either a 2 year or a 5 year service anniversary (those are the dates
that pensions become partially and fully vested). That freed up a lot of
funds that could be allocated to pensions for other employees. Second,
they changed the pension plan to a "cash balance payout" plan. This works
sort of like Bush's "private account" option for Social Security. The
company pays in a certain amount into your pension. If the market does
well during your career, you'll get a big lump sum when you retire; if
not, you'll get a tiny lump sum when you retire.

George Patterson
There's plenty of room for all of God's creatures. Right next to the
mashed potatoes.

Companies aren't required to fund plans on a daily or even annual basis and
react to every decline in their investments. There is an assumed rate of
return and the company is required to fund the plans so that there will be
enough to pay benefits if the assumed rate of return is earned.

Mike
MU-2

"kontiki" wrote in message
...
Mike Rapoport wrote:
It isn't supposed to require either a leap of faith or the company
remaining in business. The Company is suppose to deposit money to fund
the pension plan which is a trust with an independent board. The funds
are professionally managed and, barring catastrophe, there should be
enough to pay the promised benefits.

One could make the same argument that Social Security is supposed to be
just that:
"professionally managed and, barring catastrophe, there should be enough
to
pay the promised benefits." But even that is no longer sacrosanct.

The only real solution to all of this is for people to take charge of
their
own retirement via their own personal accounts that they themselves
manage.
When you delegate this responsibility to some other party you do so at
your own risk.


I agree with most of what you say.

Social Security was a well thought out, adequately funded program when it
was inplemented in 1935. The problem came when people started looking at it
as a retirement program. In 1935, life expectancy was 63. Social Security
was envisioned as insurance against being injured or killed on the job and
also it would provide income if you lived past 65 an age where you would be
uncompetitive in the workforce. It was a reasonable approach that got
derailed when the underlying assumptions started to change (life expectancy)
and the program didn't change with it.

Mike
MU-2

"Peter Duniho" wrote in message
...
"Mike Rapoport" wrote in message
nk.net...
Good points all! To add another: Anybody, including United employees
could see, in easily obtainable documents, that United was not funding
its pension obligations for many, many years. Any United employee who is
surprised that they aren't going to get their pension is a fool. The
handwriting has been on the wall for years, perhaps decades.

Is it every employee's responsibility to monitor pension funding? If not,
who's responsibility is it?

Just because the information is publicly available, that doesn't mean it's
the fault of someone other than the entity responsible for actually
funding the pension that it didn't get funded.

I can see good reasons for why the "victims" here aren't entirely
blameless. But put blame on them just because they weren't performing
watch-dog duties seems unreasonable.

Pete

You are right in a perfect world. In the current world you need to depend
on yourself or others that have the same interests as you do. Funding
pension liability is a cost for the employer and it is income for the
employee. It is easy to see why the company wants to minimize the
contributins and why the employee should want third-party confirmation that
the contributions are made.

In the United case, if the pensions had been fully funded, the company would
have gone bankrupt years ago.

Mike
MU-2

Man, there are days where I would pay *them* to let me work in their
tool department...

;-)
--
Jay Honeck
Iowa City, IA
Pathfinder N56993
www.AlexisParkInn.com
"Your Aviation Destination"