wombat_socho (wombat_socho) wrote,
wombat_socho
wombat_socho

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Something I've never understood

I'm looking at this story on the liquidation of United Airlines' pension plan. I can sort of understand the employees screaming about this, because nobody likes to see their pension getting cut by over 50%, but what I don't get is why these people trusted United to fully fund these liabilities in the first place. It seems to me that handling pensions is something the unions should have been handling in-house on a pay-as--you-go basis, with the airline either kicking in some cash as a sweetener or leaving it strictly up to the employees and their unions. On top of that, United has had financial problems as long as I can remember. What kind of idiots did the union have negotiating contracts if they couldn't get the airline to change the retirement benefits to a 401K or other defined-contribution system?

For that matter, if the unions aren't taking care of pensions and health care because they've stuck the employers with the bill, what the hell are they collecting dues for?

UPDATE Jane Galt and Will Collier also comment on this, and do comparisons with another underfunded pension fund.
Tags: culture & politics
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