Retirees of a Dearborn, MI, steel plant once affiliated with Ford will likely see their pension payments reduced, and in some cases garnisheed. After a seven-year legal battle with the UAW, the federal Pension Benefit Guaranty Corp took over the pension fund. When the bankrupt plant was sold to a Russian buyer in 2004, the buyer declined to assume the pension plans. The court gave the PBGC approval to take over pensions retroactively to October 2005, which means those who kept collecting pension money after bankruptcy may have to give some back. A similar situation is brewing in Philadelphia, where the potential buyer of two ailing newspapers is unwilling to take the defined benefit plans in the package, but instead desires to steer the money into individual 401[K] plans. Out of the 15 bargaining units, 5 are holding out. If an agreement cannot be reached by Sept. 14th, the deal may fall through. With so many union pension funds in marginal and even critical shape, and the difficulty getting unions to yield concessions required by many companies to remain solvent, we may see more of this in the near future.
