Good Pensions for Me and Not for Thee, Part II
A couple of days ago, I wrote a diary, Congress to Unions: Good Pensions for Me but Not for Thee. The idea for the diary was triggered by this article from McClatchy on the pensions that Elizabeth Dole and Robin Hayes will be receiving after they leave Congress at the end of the year.
Dole, who served a six-year term, is eligible for about $15,000 a year for life.
Now just think about that for a minute. For serving one term in the Senate, Elizabeth Dole will receive $15K per year for life. Plus healthcare benefits. And it gets even better. Using this Senate reference information, it looks like Toobz Ted Stevens will be receiving $132K per annum as his pension. Tough life, huh?
This morning, I decided to do a little bit of googling and I found this information from the UAW explaining their bargaining during the 2003 negotiations. The whole piece has a lot of interesting information on the breakdown of the retirement components but this table really jumped out at me:
UAW pension benefits: Big Three, Delphi and Visteon
Age of retiree Monthly Current Benefit Annual Current Benefit
Prior to Social Security
80% eligibility $2,730.00 $32,760
At and after Social Security
80% eligibility $1,408.50 $16,902
Source: United Auto Workers. Notes: Figures are for retirements effective on or after Oct. 1, 1999, for a UAW member with 30 years credited service at the Big Three, Delphi or Visteon.
OK, so Elizabeth Dole will be receiving a pension from the taxpayers for her six years in the US Senate roughly equal to that received by an auto-worker, her same age, who worked thirty years.
Now, with all the talk thrown around by the Republicans in the Senate about those $70 per hour Union workers at the Big 3, a large amount of that is to account for the retirees:
The crucial point, though, is this $15 isn’t mainly a reflection of how generous the retiree benefits are. It’s a reflection of how many retirees there are. The Big Three built up a huge pool of retirees long before Honda and Toyota opened plants in this country. You’d never know this by looking at the graphic behind Wolf Blitzer on CNN last week, contrasting the “$73/hour” pay of Detroit’s workers with the “up to $48/hour” pay of workers at the Japanese companies.
Yet, a few weeks emptywheel pointed out that in fact, GM’s pension plan is far better funded than the retirement plans for Exxon/Mobil, among others.
Unfortunately, things will not be improving. Today’s (12/12/08) NY Times has an article, deceptively titled Pensions Get A Reprieve. In fact, the pensions aren’t getting a reprieve; the companies that are supposed to be funding their pensions are getting a reprieve.
Because companies can deduct their pension contributions, giving them relief actually saves the Treasury money. A Senate analysis of the bill projected that it would increase federal tax revenue by a little more than $100 million over 10 years.
Unlike previous pension measures that took years to be hashed out, this bill went flying through both houses of Congress on special fast-track procedures. The House of Representatives passed the same bill unanimously on Wednesday.
The bill rolls back parts of the Pension Protection Act of 2006, which was intended to close loopholes in the federal law that requires companies to put adequate money behind their pension promises. The loopholes became starkly apparent at the beginning of this decade, when a number of big steel and airline pension funds collapsed, forcing the federal pension insurance program to absorb billions of dollars in losses.
One problem identified was the tendency of pension funds to invest in assets, like stocks, whose values can swing sharply from year to year. That poses the risk of a company’s pension fund plunging at the same time the company itself is in trouble and cannot make up for the losses.
The time has come for the Senate and the House of Representatives to put their pensions on the same footing as the vast bulk of working Americans. Senator Corker and the Senate Republicans must not be allowed to use a crisis to break unions and destroy the retirements of UAW members who negotiated their pension plans in good faith; taking pension payments in lieu of salary and wages. The Big 3 are supporting retirees who worked faithfully for thirty years. The foreign car manufacturers such as Honda and Toyota have not even been manufacturing in the US for thirty years. And they are doing it with heavy subsidies that cost the taxpaye.rs of the states they are located.
Senator Corker? Senator McConnell? Senator Shelby? Why are you working to suppress the wages and retirement benefits of these Union members? Shouldn’t you be working instead to raise the wages and benefits of the workers in your states up to the Union level? Or do you just believe that no one but a Senator or Congressman should ever be allowed to retire?