Retirement Planning Is A Confusing and Risky Affair

05/11/2005

Paul Munnis

On Tuesday a federal judge in Chicago allowed United Airlines, which is operating under bankruptcy protection, to terminate its four employee pension plans. The Pension Benefit Guaranty Corp., the federal agency that guarantees pensions, will assume responsibility for $6.6 billion in obligations under the plans, which cover roughly 120,000 current and retired workers. Those workers face the risk of sharp benefit cuts.

Democrats argue that this is proof that Social Security must be preserved as Corporations rush to dump their pension obligations to their workers. Democrats fear this sort of pension dumping will become an ongoing feature in American business. The GOP argues tha tthis is a sure reason why SS must be fixed to assure that something will be there.

Indeed companies today have three political agenda items:

-Avoid being taxed,
-Eliminate healthcare provision for workers, and
-Eliminate pension obligations.

All this is a way to increase the margins on profit for corporations. It is raising lots of trouble for Baby Boomers who seek to retire.

Baby Boomers are being rocked with lost employment, layoffs, stock market losses, threats of Social Security cuts, a loss of Medicare benefits, loss of Medicaid coverage, and the destruction of pension plans.

We hear many of them muttering about dealing with this issue come the 2006 election when they will go after incumbents with a vengeance. But history shows it is better to deal with the issues right now by making Congress aware of the sentiments.

We see that the Congress is moving to introduce a bi-partisan Bill to streamline the paperwork for medical care via standardization efforts. That is a beginning.

Also needed are bipartisan Bills to repair and extend Medicaid to provide a Universal healthcare system for all Americans.

Also, a bipartisan Bill is needed to expand Social Security so that workers can pay into pension plans and cover even more of their total retirement planning as a result. One way would be to allow pension accounts paid for by way of a 401K or IRA investment option.

The situation is festering now and the day of reckoning is coming along rapidly over these issues. People would be wise to make their voices heard in Congress right now.