Private pension deficits an underreported crisis

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  • Twin Lights Louisville, KY
    Dec. 30, 2012 8:08 p.m.

    Under reported? Maybe. A surprise? Hardly.

    Underfunded pensions have been with us since there were pensions. I have a significant problem with a company being allowed to enter bankruptcy, off load their pension to the Pension Benefit Guaranty Corporation and go on their merry way.

    In several cases I have followed the company that went through bankruptcy and off loaded their pension liabilities is swimming in money 3 to 7 years later. But the workers who were promised benefits have suffered drastic cutbacks (the PBGC only guarantees a portion of the pension).

    My solution? Let pensions be subject to a post bankruptcy claw back. For 10 years after the bankruptcy, the company submits audited financials to the PBGC. If their profits go above a certain level, they owe the PBCG (and their former workers) some "back pay".

    Bankruptcy is a necessary feature of a capitalist economy. But easy off loading of contractual promises to employees should not be part of it. Pensions should be treated like what they are - deferred salaries. They should go to the top of the creditor list.

  • Ultra Bob Cottonwood Heights, UT
    Dec. 30, 2012 9:58 a.m.

    When the winning streak is over, grab the money and run.

  • Hutterite American Fork, UT
    Dec. 30, 2012 8:40 a.m.

    Unfunded pension plans are practically ponzi schemes, yet legal.

  • KDave Moab, UT
    Dec. 30, 2012 7:54 a.m.

    Ommited from this article is that the Fed Govt, offers pension insurance to corporations. Corporations can under-fund their pensions programs knowing they can fall back on the insurance policy and let the tax payers cover it,