Skip to comments.Cost of Pensions Adds to Factory Town’s Troubles
Posted on 09/03/2006 10:40:25 PM PDT by neverdem
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 citys 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 citys budget. In Buffalo, the states 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.
Its 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 ...
Here's the first webpage of this story which is the fourth in a dismal series about financing government across the NY State. The other stories are linked.
Good Grief I am a physician and I hope to maybe have that much money a year guarenteed when I retire. But I will have to work till age 67 at least.
pensions are such a huge, huge problem. They are a horrible idea. If there are any companies still offering pensions they should be delisted from the stock exchanges. They are open-ended committments which cannot be truly quantified and are far more expensive than other things like 401Ks which are better for employers in most cases.
The answer for these political scumbags is the same answer they always come up with - - tax hikes. Get ready to grab your ankles - - here come the slobbering scumbag politicians, with their pants around their ankles.
Can you imagine if in the next generation or so (when many current retirees with lifetime pensions are still alive) and someone figures out an anti-aging grug or perfects "replacement organ growing"? Imagine the cost to these companies if the average lifespan moves toward 120-150.....
drug. of course...
What's the money going for?
(No more Olmert! No more Kadima! No more Oslo! )
This is exactly what every community in NY is looking forward to. We are dying economically due to the use and abuse of the unions and the corrupt politicos that continue to take contributions and align themselves with the public sector unions.
Thanks for the link.
Where is Hillary and Schumer to help these people?
Let's also consider that folks in positions of decision-making have gone along with much of what unions have wanted.
For example, there is NOT ONE component school district (e.g. Lockport, Newfane, etc.) in the Orleans-Niagara BOCES Supervisory District that has teachers contributing to the cost of their health insurance premiums for the base health insurance plan.
In today's economic environment, is it a good idea to continue to pay 100% of the health insurance premiums for teachers and other professionals?
I wonder if that's where most of it's going, though. I can't get the city's website to come up for me. I'll try again later and see if it has any details on how the tax money's spent :)
Of course, Democrats have run Buffalo, Lockport, etc for decades. There will be no blame assigned to them.
No, the anger will be directed at George Pataki trying to reign in state spending or George Bush trying to restrain federal spending.
You are right on target. We pay their healthcare, pensions, cosmetic surgery etc for their lifetime. We don't even collect taxes on their pensions, that alone would help save the state millions.
I am running for assembly (144th) against Hoyt. He is in bed with all of them as all the NY politicos are.
They are killing us and they don't care in the least, all the while getting their own pockets lined with our tax dollars.
I'm sure the multi-national corporations who have no allegiance to the United States or its citizens have nothing to do with the problem.
They pound us for tax breaks and TIF concessions to build a new facility and then pull up stakes as soon as they can flee to a third world or communist nation to produce their products at pennies on the dollar.
Those people receiving pensions are our fellow Americans. They aren't the morning trash to be thrown out when you hear the garbage truck coming down the street.
I stand with the working stiffs in blue collar America every time. Its the corporate welfare I object to, especially in the form of illegal immigration that corporatist American drools over.
Of course I'm an odd duct. I'm a Harry Truman, Scoop Jackson Democrat. Neither party truly represents.
I agree with you to a point. I am not throwing them out with the trash as you say. You want the right corrective action? One that congress fails to take any action on?
Remove the taxes (tariffs) on exports.. The companies in the states have to pay taxes on exports. This is upside down and is opposit of the original intention for funding the federal government.
I am not going after the private sector unions, their success or failure will depend on the open market.
What I am against with every fiber of my body is the continued abuses and corruption of the public service unions. They are paid with our tax dollars, pensions we can only dream of. Pay no taxes on their state, county and local pensions, have free healthcare for the rest of their lives and WE pay for it.
You tell me how many people in the private sector that are getting the salaries, healthcare and pensions that the unionized members of seiu, csea etc public service unions are getting and are still in business.
The city of Buffalo has more retired union workers than are currently employed, payroll and pensions are the majority of the budget and the city is on it's death bed with the only life support, a control board.
The city unions are demanding more and more, they are protesting in front of the control board members houses intimidating and threatening the family members.
Who's to blame? The union bosses and the rotten to the core politicos that run this state. This mayor is now seeing things from another perspective, it will be interesting to see how he handles the unions now.
Can't get your webpage to work. Wondering where your district is?
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.
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'.