The anger and fear exhibited by public employees in Wisconsin about their pensions resembles the fear retirees in private pension plans have experienced for many years. Pensions – public and private – could once be counted on by retirees.  Today, they fear the rug will be pulled out from under them.

The resemblance stops there, because there is a stark difference between public and private plans.  Private sector retirees and older workers have seen companies steadily renege on promises for earned retiree health and pension benefits – with the government doing little to stop the trend.

Millions of retirees in private plans have already had the rug pulled out from under them by companies using pension assets for restructuring purposes at the expense of retirees, all with the full knowledge of the courts and the federal government.

These “back door reversions” leave private pension assets vulnerable to market downturns, and leave taxpayers vulnerable to pick up the tab at the Pension Benefit Guaranty Corporation.  Unlike public plans, once a company goes bankrupt, there are no revenue-raising options such as taxation that can help private pensioners recoup their losses.

Retirees in private plans feel as strongly as those in public plans and are asking Congress to prohibit these reversions unless the plan is sufficiently funded.  It’s a budget-neutral solution to protect private pension assets that both Republicans and Democrats should enact now before the anger and fear of retirement insecurity spreads from state capitols to the U.S. Capitol.

Karl Forister

Renton