Companies drop pensions, pay execs $350 mln

[Furloughed80]

Companies drop pensions, pay execs $350 mln--GAO

Thu Nov 19, 2009 1:01pm EST





* GAO studied companies with unfunded pension liabilities * U.S. Rep. Miller mulls executive compensation freeze * Perks from private helicopters to health club dues By Kim Dixon and Ross Kerber WASHINGTON/BOSTON, Nov 19 (Reuters) - Ten large U.S.
companies paid senior executives a total of $350 million in the
few years prior to dropping traditional pension plans for
employees, a Congressional watchdog said on Thursday. Forty executives in a range of industries received the
compensation in base salaries, bonuses, severance and perks in
the five years before the pension plans failed, the non-
partisan Government Accountability Office said in a new
report. U.S. Rep. George Miller, who chairs the House Education and
Labor Committee, said in a statement he is considering
legislation to freeze executive compensation if a company's
rank-and-file pension plan becomes significantly underfunded. "It is fundamentally wrong that executives were able to
line their pockets with millions of dollars ... while watching
their workers' retirement security slip into peril," said
Miller, who requested the GAO's investigation. Four cases in particular were singled out where the dropped
pensions covered a total of more than 202,000 participants and
were left underfunded by some $11 billion. A source familiar with the report said the four most
egregious cases cited by the GAO involved UAL Corp's (UAUA.O)
United Airlines, U.S. Airways Group Inc (LCC.N), electronics
company Polaroid and insurer Reliance Motors and Drivers. The other cases involved auto parts maker Harvard
Industries Inc (HAVA.PK) , steel-makers Republic Technologies,
National Steel and LTV Steel and textile companies Westpoint
Stevens Inc (WSPTQ.PK) and Pillowtex, the source said. In the case linked to United -- by far the largest of those
analyzed by the GAO -- the airline missed nearly $1 billion in
required pension contributions. At the same time, it awarded its top three executives more
than $50 million in salary, bonuses, stock and supplemental
retirement benefits, the report said. At Reliance, a family-owned insurance company, the CEO, COO
and their families logged over $200,000 in company plane and
helicopter costs for personal trips to China, Greece, Hawaii
and elsewhere. The report looked at publicly-traded companies with more
than $100 million in unfunded liabilities. Failing pensions deplete the resources of the Pension
Benefit Guaranty Corporation, a government agency that insures
traditional corporate pension plans designed to pay fixed
amounts to some 44 million American workers and retirees. Many U.S. companies have dropped traditional, defined-
benefit plans in favor of less-costly 401(k) programs that put
more risks onto workers. The pension guaranty agency said last week its annual
deficit nearly doubled to $22 billion in fiscal 2009 from $11.2
billion in fiscal 2008. The PBGC this year has assumed responsibility for pension
plans at auto parts supplier Delphi Corp (DLPIV.PK), retailer
Circuit City Stores Inc (CCTYQ.PK), IndyMac Bank (IBFSL.PK),
Lehman Brothers Holdings Inc (LEHMQ.PK) and textile maker Dan
River Inc, among others. The GAO report was posted at:
here
(Reporting by Kim Dixon in Washington and Ross Kerber in
Boston; editing by Ros Krasny and Andre Grenon )

 

[bluefin]

United back on top again! About time it's brought to light the truth about the pensions at these companies...but what is going to be about?.....0, zilch, squat, nada!

 

[Rez O. Lewshun]

If you question this form of 'capitalism' you might be called a socialist...

 

[waveflyer]

Exactly- you could re-title this article: "What happens when you vote Republican:"

 

[clickclickboom]

Let me guess you prefer the govt deciding how to bankrupt this country and whether your family member gets a cancer treatment or not? Or would you prefer to give Jose the River Crosser your Social Security Benefits?

 

[wms]

If you question this form of 'capitalism' you might be called a socialist...

So there's no immorality and curruption in socialism and communism? This has nothing to do with capitalism. It has to do with ethics and morality in business. Don't let Michael Moore and the rest of the social elitists, who have become rich via capitalism by the way, talk you into confusing the two.

 

[UALRATT]

So there's no immorality and curruption in socialism and communism? This has nothing to do with capitalism. It has to do with ethics and morality in business. Don't let Michael Moore and the rest of the social elitists, who have become rich via capitalism by the way, talk you into confusing the two.

Ideology! Idiots of logic. You don't have to look much further than in your own household to see how much support you give to the communist of...well for starters "Made in F*****G China"

 

[ackattacker]

Let me guess you prefer the govt deciding how to bankrupt this country and whether your family member gets a cancer treatment or not? Or would you prefer to give Jose the River Crosser your Social Security Benefits?

I would prefer the by-and-for-the-people government decide whether my family member gets a cancer treatment over the profit-driven insurance companies. Yes. One has an incentive to deny and the other does not.

Just like the executives at these companies have a profit incentive to underfund the pensions in violation of their labor contracts. Do you expect them to hold themselves accountable?

 

[wms]

Ideology! Idiots of logic. You don't have to look much further than in your own household to see how much support you give to the communist of...well for starters "Made in China"

What does that have to do with ethics of business in the US? My point is the idea that changing the form of government in our country won't transform the moral fiber of unethical corporations. And don't think for a second the government is any more ethical or cabable than corporate america, because if anything they're even more corrupt and incompetent.

 

[wms]

I would prefer the by-and-for-the-people government decide whether my family member gets a cancer treatment over the profit-driven insurance companies. Yes. One has an incentive to deny and the other does not.

Just like the executives at these companies have a profit incentive to underfund the pensions in violation of their labor contracts. Do you expect them to hold themselves accountable?

It's been a long time since our government was by-the-people-and-for-the-people. And it has nothing to do with which party may be in power.

The government has incentive to deny also. Like not enough money in the program to pay for it. Or they may just put a person far enough down the waiting list so they don't live long enough to get the treatment.

My friend is a Mexican in Pueto Vallarta and his family had to switch to the Gov't option because the private got too expensive (MX has both like we may get). His father was diagnosed with heart disease and was scheduled for heart surgery to be done in six months in Guadalajara because that was the next available slot. He died in three.