Posted on 09/03/2006 10:40:25 PM PDT by neverdem
Costly Promises
LOCKPORT, N.Y. — For two and a half years, Michael Tucker was mayor of this small city by day and an autoworker by night.
Then in May, he became one of the nearly 50,000 workers at General Motors or its former Delphi parts division to take buyouts, lured by the $33,000-a-year pension his company offered. That pension, and a smaller one he expects to collect from the state after his years as mayor, makes him a little unusual in a nation where more and more workers are not covered by such plans.
But now, as mayor of Lockport, Mr. Tucker, 49, is seeing the budget of this city north of Buffalo consumed by the kind of pension and retiree health care costs that helped push Delphi into bankruptcy. So he is preparing to do what his former employers, G.M. and Delphi, have already begun to do: ask the city’s five unions for concessions, including limiting wage increases and cutting benefits, when labor contracts expire next year.
Cities across New York State are only now starting to grapple with the so-called legacy costs of pensions and retiree health care benefits, and the situation in Lockport — with its rising property taxes and strained budget — is emblematic of what other cities may face in the future.
Pension costs in New York City have quadrupled in the last five years, and they will soon consume 10 percent of the city’s budget. In Buffalo, the state’s second-largest city, pension costs have risen to $24 million, from $4 million, in the last five years, and the city is now overseen by a financial control board.
“It’s going to be tough negotiations,” Mr. Tucker said last month, as he stood in front of the giant Delphi radiator plant where he once worked and...
(Excerpt) Read more at nytimes.com ...
Oh heck they welsh on their promises to retirees all the time! It's really sad when you work for a company for 35-40 years and think you'll have at least a certain amount guaranteed and then when you're old the rug is pulled out from under you.
http://albanysinsanity.com/
http://www.rusthompson.com/
144th- Grand Island, Buffalo
That goes especially for us in NYS when come November we end up with dem governor, senate, assembly, attorney general, comptroller and a lot of mayors, school boards and city councils. Like you said, grab your ankles.
No, grab your wallet, your kids, jump in the care and leave....
If and when that happens, it will be the complete down hill slide.
I am asking all my Dem friends to vote Suozzi. I am going to another debate tomorrow night with him and Faso.
Spitzer has blown off WNY again. I think the dems up here are catching on but, Spitzer will win because of the City.
The idea of pensions is to pay for them when the people are actually earning them.
If an employer drops the money into the fund each payday into the pension fund, it should be there when the people retire and draw the pension.
That's the advantage to the 401k type situation, the employee can actually see the money on the statement, instead of just hoping that the money will be there. But there is no reason that pre-paying the pension can be done with a traditional pension as well.
The american way is to take responsibility for yourself and get paid for what you do. The pensions do not do that. 401k plans do that. You put money in, you get money out. With pensions, you put money in and you get money out plus some from your neighbor. That is not the american way. That is robbery.
What are you getting from your neighbor? And why do you think that pensions aren't part of the American way? They are very much the American way, at least when the objective is to develop a high standard of living for our nation and its citizens.
When govt. raises taxes to pay for public employee union pensions, that is taking from the neighbor.
When the company can not pay for a pension, that means the pension was too generous for the output produced by the company and the PBGC which guarantees the pension, takes tax payer dollars to pay it off.
The way to avoid taking money from anyone is for people to have a 401k. Whatever you put in, you get out.
If taxes are being raised for any reason, it is being done by elected officials and you do have recourse in the matter, vote them out.
Pensions are being dumped onto the PBGC, in many cases, by corporation wanting to simply off load their agreed to responsiblity with their employees.
Pensions were offered,for decades, in lieu of greater wage increases and corporations knowingly failed to properly fund the pensions, which now causes self made problems for the corporations that underfunded the pension plans.
In many cases during the merger activities of the 80s, pensions were taken by the corporate raiders and used to pay down debt before the business was broken up and sold. The employees and retirees were left with nothing.
Sorry management, not pensions, is the bane of American business.
convert all pensions to 401k and everything is above board and each retiree gets out what they put in.
pensions require predicting the future, honest among public officials and private managers. any breakdown will mean taking my money to bail somone else out.
get rid of the pensions and use 401k instead.
I absolutely can, which is why I think its suicide to even put pensions on the table since as the person who pays the pension there is so, so, so, so much more downside risk than upside risk. The actuarial tables are not good for this unless you are sure you are hiring smokers, drinkers or gay men who are going to die well below the median life expectancy. They are also not a very free market solution since they create dependency and stagnation in a person once they 'retire'.
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