Mar 16, 2015
At the end of February, Judge Steven Rhodes, who had presided over the Detroit bankruptcy, declared that the huge cuts to retiree pension benefits he approved last year were only a first step. Said Rhodes, the money is just not there to fund regular pension benefits, not for any retirees. Cities and states will have no choice but to get rid of regular pension benefits altogether, at best to turn them into some kind of 401(k) style plans. So he said.
Even without bankruptcy, officials are preparing to decimate pensions. In 2013, the Illinois state legislature passed a law to cut pension benefits whenever the budget faces an “emergency.” The Democrats who passed this attack called it “pension reform.”
If pension funds are underfunded today, it is only because public officials have taken the money that should have gone into the pension funds, and used it for corporate tax breaks. They have been funneling billions to corporations through tax breaks and other “incentives.”
The news media and public officials like to pretend that pensions are some kind of gift given to the worker by the employer. What a lie! Pensions were part of the workers’ pay. They were deferred payment to all workers, young and old. In return, the states and municipalities guaranteed they would return this money to the workers when they retire.
No, the money for retiree pensions is money the workers already earned. Call bankruptcy deals and “pension reform” what they are: theft!