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tazzygirl -> RE: A few Labor Leader, cost 18,500 their jobs (12/13/2012 11:06:51 AM)
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quote:
ORIGINAL: FatDomDaddy
quote:
ORIGINAL: subspaceseven
But everyone is still blaming the workers..for going o strike..
No, just the labor leaders who recommended the Bakers skrike and the ones who voted for it because now...
They have nothing.
NOt exactly.
The Pension Benefit Guaranty Corporation (PBGC) is an independent agency of the United States government that was created by the Employee Retirement Income Security Act of 1974 (ERISA) to encourage the continuation and maintenance of voluntary private defined benefit pension plans, provide timely and uninterrupted payment of pension benefits, and keep pension insurance premiums at the lowest level necessary to carry out its operations. Subject to other statutory limitations, the PBGC insurance program pays pension benefits up to the maximum guaranteed benefit set by law to participants who retire at age 65 ($54,000 a year as of 2011).[2] The benefits payable to insured retirees who start their benefits at ages other than 65, or who elect survivor coverage, are adjusted to be equivalent in value.
During fiscal year 2010, the PBGC paid $5.6 billion in benefits to participants of failed pension plans. That year, 147 pension plans failed, and the PBGC's deficit increased 4.5 percent to $23 billion. The PBGC has a total of $102.5 billion in obligations and $79.5 billion in assets.[3]
http://en.wikipedia.org/wiki/Pension_Benefit_Guaranty_Corporation
Most companies provide pensions through single-employer plans that they fund themselves. When companies with these plans file for bankruptcy protection, they sometimes terminate the plans, leading the Pension Benefit Guaranty Corp., the government agency that insures corporate pensions, to take over the plans and make payouts to their retirees.
With the multiemployer plans from which most Hostess retirees receive benefits, the PBGC doesn't step in unless the plans become insolvent. If that happened, the PBGC would send roughly $12,870 for each employee with at least 30 years of service, according to an agency spokesman.
The Bakery & Confectionary Union & Industry International Pension Fund, the largest fund covering Hostess bakers, was 72% funded when Hostess stopped making contributions, the company said.
Teamster-represented employees at Hostess didn't contribute a portion of their wages toward pensions, a union spokesman said. But among workers in the bakers union, it was "standard practice," said Mr. Rayburn, Hostess's CEO.
.........
For example, John Jordan, a union official and former Hostess employee, said workers at a Hostess factory in Biddeford, Maine, agreed to plow 28 cents of their 30-cents-an-hour wage increase in November 2010 into the pension plan.
Hostess was supposed to take the additional 28 cents an hour and contribute it to the workers' pension plan.
"This local was very aggressive about saving for the future," he said.
Employees in Biddeford began directing wages toward pensions in 1955, and the amount grew to $4.28 an hour per employee.
Amounts varied by location, and it isn't clear how many unionized employee groups participated in the arrangement.
In five months before this past January's bankruptcy filing, the company missed payments to the main baker pension fund totaling $22.1 million, Mr. Freund said.
After that, forgone pension payments added up at a rate of $3 million to $4 million a month until Hostess formally rejected its contracts with the union. The figures include company contributions and employee wages that were earmarked for the pension, according to Mr. Freund.
Mr. Driscoll, the former Hostess chief executive, told employees in an August 2011 letter that the decision to "temporarily suspend" pension contributions was a "necessary bridge" to a larger plan to turn around Hostess.
In the fiscal year ended in May 2011, Hostess had a net loss of $341 million on sales of $2.5 billion.
As the company's financial condition deteriorated, "whatever cash it had was being used to fund the business, to keep it afloat," Mr. Rayburn said.
It might have been "impossible" to undo the agreements that called for Hostess to make pension contributions using employee money, Mr. Rayburn added. One reason: Hostess could have been too short of cash to make up the difference, though he said he isn't sure.
http://finance.yahoo.com/news/hostess-maneuver-deprived-pension-051400720.html
So they arent exactly out with nothing. They just got fed up with being ripped off.
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