Harvey/Pri – here’s an interesting article for you. Again – credible source (WSJ). It outlines how the corporations and media have painted a false picture of the source of pension underfunding.
To help explain its deep slump, General Motors Corp. GM -0.16% often cites “legacy costs,” including pensions for its giant U.S. work force. In its latest annual report, GM wrote: “Our extensive pension and [post-employment] obligations to retirees are a competitive disadvantage for us.” Early this year, GM announced it was ending pensions for 42,000 workers.
But there’s a twist to the auto maker’s pension situation: The pension plans for its rank-and-file U.S. workers are overstuffed with cash, containing about $9 billion more than is needed to meet their obligations for years to come.
Another of GM’s pension programs, however, saddles the company with a liability of $1.4 billion. These pensions are for its executives.
This is the pension squeeze companies aren’t talking about: Even as many reduce, freeze or eliminate pensions for workers — complaining of the costs — their executives are building up ever-bigger pensions, causing the companies’ financial obligations for them to balloon.
