There goes the gravy train

N2 · Post by N2 » Mon Sep 19, 2005 5:31 am

Taken from AVweb's avflash this morning..

Delta, Northwest, Expected To Dump Pensions...
It's business as usual at Delta and Northwest Airlines despite their dramatic back-to-back bankruptcy filings on Wednesday and most employees and passengers would notice little, if any, difference in either operation. But for retired employees or the soon-to-be retired, it's a different story. One of the principal benefits of bankruptcy protection is the opportunity to ask a bankruptcy judge to allow the airline to walk away from the company pension plan. United did it earlier this year and some retirees saw their retirement incomes chopped in half or more in the blink of an eye. In fact, according to Air Transport World, the Northwest CEO admitted the airline filed for Chapter 11 protection on Sept. 14 to avoid making a $65 million pension fund payment on Sept. 15. Now the U.S. Pension Benefit Guaranty Corp. (PBGC), which will likely be saddled with the under-funded pensions -- it got United's -- is crying foul, saying bankruptcy doesn't entitle the airlines to simply stop paying. The PBGC's Executive Director, Bradley Belt, said the airlines continue to be legally bound to make the payments. "Nothing in the bankruptcy code requires companies to skip their pension funding payments," Belt said. In United's case, it took a ruling from a judge that continuing to fund the pensions would make it impossible for the company to emerge from bankruptcy

North Shore · Post by **North Shore** » Mon Sep 19, 2005 9:15 am

Man, two posts on pensions from me today...

UNBEF*&KINLIEVABLE!!! People work for your company for 25, 30, 35 years, and at the end of the road, when they are too old to go out and get another job to make up the shortfall, the company reneges on their pensions. Do they even teach ethics at business school these days? How about laws that make companies invest their employees' pension contributions so that they'll be there when they come to draw them out...

'Course, the other part of me says to take care of your own retirement savings just in case this sort of BS happens where you work..

Det · Post by **Det** » Mon Sep 19, 2005 9:20 am

North Shore wrote:'Course, the other part of me says to take care of your own retirement savings just in case this sort of BS happens where you work..

You hit the nail on the head... it's a brave new world, not the one our fathers and grandfathers lived in. You've really got to learn to put aside for yourself.

Certainly not the easiest thing to do!!

Boss Hawg · Post by **Boss Hawg** » Mon Sep 19, 2005 6:51 pm

North Shore wrote: Do they even teach ethics at business school these days? How about laws that make companies invest their employees' pension contributions so that they'll be there when they come to draw them out...

As a fairly recent business grad I can tell you that they do still teach ethics. Unfortunately right after that is the course where they tell you to maximize profits at ALL costs. The relentless pursuit of profits (ie greed) is what business is all about. Take a look at all the scandals that are going on in the business world today.

Just today I got a rebate cheque from a mutual fund company that I made the mistake of buying one of their funds a few years ago. There was some kind of scandal about the how they timed their trades or something, but they got busted and had to repay all the money. That'll be the most I ever made off a mutual fund too.

Like you say, look after yourself, then you only have yourself to blame if things go south. I do feel bad for all the guys and gals that are going to get screwed at the airlines there, and up here when CPP runs dry.