New pension law greatly weakens workers' retirement

Apr 19, 2004

The Congress has just passed legislation to let corporations reduce their pension contributions by 80 billion dollars over the next two years. This bill was supported by both Democrats and Republicans, who voted for it overwhelmingly. Ted Kennedy joined with Republican Judd Gregg of New Hampshire to steer it through to passage. Both claimed that this is "the ultimate jobs bill," saying without it, companies would have to put money into their pensions instead of into job creation. In fact this money is not going into job creation, but only into more profits – which undoubtedly pleases Wall Street.

It's not surprising that companies would like to get out of paying into their pension funds. But what's shocking is that union officials supported this same bill. The United Auto Workers supported the law, as did the Machinists Union, the Transport Workers Union, and the Airline Pilots and the Association of Flight Attendants.

What is needed is a requirement that companies fully fund their pension plans and be prohibited from terminating them.

Instead the pensions of 35 million workers have been weakened – just so big companies will have 80 billion dollars more to show in their profit margins. This law puts further in jeopardy the health insurance of retirees, which 459,000 have already lost. It is simply a robbery at the expense of retirees and workers who are looking forward to retiring, carried out by the Republicans and Democrats working hand in hand.