Apart from the call for job formation, labor issues, such as strengthening the collective bargaining or job safety laws, rarely receive much attention by candidates for national office. Corporate pension plans, funded, underfunded or looted, are another example of this glaring omission.
“Pension security is looming large in public opinion polls, but politicians keep ducking this issue,” asserted Paul Edwards, Chair of a coalition of pension activists around the country. These workers, who are retired or were forced to retire, are banding together to help each other in their struggles with the likes of Greyhound, General Electric, Pan Am and United Airlines.
Coalition members marched together with retirees of General Electric at rallies on June 24th. The dispute is over GE’s refusal to provide a cost of living increase from the company’s rich pension trust fund. The GE pension fund has $30.2 billion in assets and is $7 billion overfunded. However, retirees have not received a COLA increase in their pensions since 1991.
Members of Congress, with very few exceptions, have not supported these retirees’ efforts. These legislators have one of the most generous pension plans in the nation, including annual cost of living increases, paid for by the taxpayers.
At the 20th anniversary celebration of the citizen-based Pension Rights Center (which I helped establish), a brochure informed the attendees that millions of workers lose expected pensions each year. The causes: fraud, firings, unfair rules, bankruptcies and mergers.
Corporate contributions to pension plans have declined sharply in the past 15 years. The rise of 401(k) plans is more desirable to companies because they can choose to match some or all the payments into the plan that the workers make. But many workers make none or few payments because they cannot afford to after their daily living expenses are met.
Karen Ferguson, director of the Pension Rights Center, and coauthor, Kate Blackwell write in their new book, Pensions in Crisis, (out in paperback): “A 401(k) plan typically costs a company that chooses to match employee contributions about 1 to 2 percent of its total payroll costs, compared with the average 7 percent it costs to fund a defined benefit pension plan.” This illustrates the decline or private pension plans in America. Other western countries are far ahead of the U.S. in this category.
The Pension Rights Center is the only national citizen organization watchdogging how Congress and corporate employers handle what is the largest capital pool in the world. Private and public employee pensions now total about $4 trillion.
These pension monies, legally earned and owned by the workers, are invested by someone else — either the company employer, the banks or insurance companies. Some labor pension plans are controlled by the unions themselves. A few of these have been misused or looted by corrupt union leadership.
Most of the pension funds are invested in the stock market which means that workers should have a large say in many corporate governance decisions. But, despite large holdings of stocks in the nation’s largest companies, other company executives do the investing without any workers having any say.
If worker pension monies were controlled by workers through accountable intermediate institutions, the balance of power that is now so heavily in favor of big business would shift significantly toward working Americans.
For the brochure, A Call to Action and What You Can Do, write to Pension Rights Center, 918 16th Street, N.W., Suite 704, Washington, D.C. 20006.