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Company Pensions and Executive Pay
By JLP | January 21, 2006
I try not to get into political issues on AllThingsFinancial, but this has been grating on my nerves. Oh, and this is coming from a Republican.
This article, CEOs Cut Pensions, Pad Their Own, by Michael Brush brings to light what has been bugging me about corporate America. Trust me, I understand BOTH sides of the pension issue. However, it seems a tad bit hypocritical for company executives to cut pension benefits for employees and then get rewarded for cutting expenses. If times are so tight in corporate America then how can they afford to give raises to CEOs and other executives?
Nothing makes employees more cynical than to see their benefits cut while the executives live high on the hog.
Topics: Miscellaneous | 4 Comments »
January 21st, 2006 at 9:21 pm
Brush’s article is pretty slanted. He’s talking about “freezing” pensions which is not the same as reducing benefits. New employees are simply not eligible for the plan. Defined benefit plans have been on the way out for decades, ever since the advent of the 410(k) plan. Shouldn’t Americans be encouraged to take more personal responsibility and rely less on others?
January 21st, 2006 at 9:28 pm
THC,
I agree with what you say.
There is one quote at the end of the article that bugs me:
But Klinger, at Responsible Wealth, thinks that the uncertainties of investing in a 401(k) plan are worse. “It turns a secure retirement into an uncertain retirement. People might be better off if the market soars. Or else the market might stumble along.”
I’ve read lots of stuff about people who lost their pensions WHEN they were in retirement. The idea of a company pension taking care of you through the rest of your life is wonderful, but its not grounded in reality.
January 22nd, 2006 at 2:34 pm
I work for IBM and as I am sure that you know, they just announced that our pension was going away. However, they will be giving us the same amount to put into our 401(k) plan. I personally think that this is a good thing. I would much rather have more control over my retirement.
I also agree that it is tough to see CEO’s with their huge salaries and bonuses while our health plan gets worse every year and our ESPP gets killed (went from 15% discount to only 5%). Just tough for the “little people” to take.
January 24th, 2006 at 10:18 am
RS, our ESPP did the exact same. 5%?! Yeah right…