Those pesky pensions....

[Birdy]

Searching for the real (pension) killers

Andrew Steele

The CAW is adopting the OJ defence.

Those conscious during the wall-to-wall coverage of O.J. Simpson's trial will remember his post-verdict declaration that he would devote his life to finding the “real killers.â€

For the vast majority of the public who believe The Juice did it himself, this was a classic case of accusatory misdirection, pointing the finger at an obvious straw man to distract from one's own sadly apparent guilt.

Like OJ's quixotic quest for justice, the Canadian Auto Workers union is leading the charge in demanding the government guarantee pensions for auto workers.

At the time of writing, pension protection demands were a top story on the CAW site.

Letting pensioners lose a penny was “unconscionable,†according to CAW President Ken Lewenza.

The CAW organized a protest rally at Queen's Park, directing fearful pensioners and workers toward the Ontario government to backstop their retirement earnings.

But the reality is that guilt for this risk to pensioners sits heavily on the shoulders of the CAW.

When the provincial NDP government allowed the contributions to auto company pension plans to be skipped, the CAW president at the time was in firm agreement. Bob White actually “strenuously†lobbied the NDP to relax the protections.

One might ask if it was possible the union was merely incompetent, hoodwinked by dishonest management bosses.

But the truth is that at the time concessions were made to reduce the funding of these plans, the CAW clearly understood the potential risk to members.

When Massey Ferguson went bankrupt in the 1980s, CAW member pensions overloaded the Ontario Pension Benefits Guarantee Fund. The Ontario government had to loan the OPBF $25-million to ensure members were kept solvent. (A similar loan today would be on the order of four to six BILLION dollars for GM alone, which is clearly impossible.)

In 1994, the Toronto Star reported on two whistleblowers within the CAW who provided a clear warning of the crisis to come. "I've now taken a close look at the way the pensions were negotiated and it makes me sick," one of them told the newspaper. "My friends (in the CAW national office) stuck it to us."

The Star paraphrased the whistleblowers' concern:

"Murphy said auto workers are retiring as young as age 46 on a pension of $2,600 a month but many do not realize that $1,700 of that income is in special allowances that are unfunded.

"If any of the sponsoring corporations - principally Ford, Chrysler or General Motors - gets in deep trouble or close, the special payments to former employees are not guaranteed.

"Murphy and Karl Zimmermann, a CAW Local 222 benefits specialist, have obtained GM pension financial statements that show there are 36,000 GM plan members and $1.5 billion in plan assets, but total windup liabilities of $2.5 billion, which adds up to a funding deficit of $1 billion."

The whistleblowers were dismissed by Buzz Hargrove as “a group of two†and the lame defence of the vital Ontario Pension Benefits Guarantee Fund was offered up.

Even last August, Hargrove was continuing to dismiss any threat to the payments to members as “so remote a possibility it's not worth speculating on.â€

Members should seriously consider the many warnings that the CAW received over the years that their pension strategy was unsustainable and would result in the collapse of members' benefits. And they should ask the union leadership to justify their role in allowing this crisis to happen.

Because these days, the union doth protest too much, methinks.

[M.O.B.E]

... the CAW clearly understood the potential risk to members...

..In 1994, the Toronto Star reported on two whistleblowers within the CAW who provided a clear warning of the crisis to come...

Because these days, the union doth protest too much, methinks.

Screw them I say, commie bastids! They dug there own greedy pit now we should fill it in on them.

[Birdy]

I don't think even Andrew Steele wants anybody buried alive.

But maybe just some recognition from the CAW that they're no saints on the issue. It's hard living in Chatham and thinking like this. I have to be careful what I say even sitting around on a patio with friends drinking beers. Lots of finger pointing going on in this town. Lots of die-hard unionists at a time when the union's dying hard. Eek.

I find myself becoming the biggest advocate of skilled trades and sustainable agriculture.

That, and a funded RRSP programme - matched contributions, that kind of thing. All of this thinking that the worst couldn't nor wouldn't happen and then happening needs to be a wake-up call for everyone, if we're to ever learn from it collectively.

[SaggyBalls]

It's sad that the pension funds were not protected.

Somebody LET that happen.

[Birdy]

Protected, or funded?

We've learned now that it's impossible to protect thin air.

[phishtaper]

regardless of the industry or the specifics of a negotiated plan, the bottom line is that all pension funds are in trouble. aging demographics, early (forced) retirements, fewer contributors and shocks to world investment markets mean moneys coming in often cannot support moneys going out. in some cases, 20% to 30% return is necessary just to keep the fund above water - and that ain't easy nowadays.