NYT: How Wall Street Wrecked United's Pension

[Pirate Smile]

Bob Stone, who retired last year as a mechanic at United Airlines, belongs to a union that wants details about the failure of the pension plan. "We have to learn what went wrong," he said.

By MARY WILLIAMS WALSH
Published: July 31, 2005
HAD anyone listened to Doug Wilsman, tens of thousands of United Airlines employees would not be facing big cuts in their pensions. And the federal agency that guarantees pensions might not be struggling with its biggest losses ever.

So who is Doug Wilsman? He is a retired pilot and a former fiduciary of United's pension plan for pilots, and in 1987 he discovered that the company had abandoned its older, tried-and-true approach of investing retirees' money in bonds timed to pay when the pensions came due. Instead, it had bought into the promises of Wall Street that it could put less money into the plan - and take out more later - if it just put most of the assets into the stock market.

Mr. Wilsman was skeptical of such promises, and soon after learning of the change in strategy, he filed a grievance with his union, the Air Line Pilots Association. "Hey, you guys are really building yourselves a trap," he recalled warning them at the time. "Someday, at the worst possible moment, when the bottom falls out of the stock market, the plan is going to have to come up with new money, and it's going to be enough to kill the company."

"Everybody knows stocks are cyclical," Mr. Wilsman said last week. So is the airline business. All along, he said, he thought it was almost inevitable that both would one day go south at the same time, with catastrophic results - which is just what happened this year.

http://www.nytimes.com/2005/07/31/business/yourmoney/31pension.html

[babylonsister]

1. This is important for people who work for airlines. Most think

politics aren't involved; they are wrong.

[acmavm]

2. This is important for everyone who is facing the problem of having their

retirement money managed by some schemers and crooks who want to invest it in the stock market. That is just sheer bullshit.

[susanna]

3. ...and yet * wants to tie Social Security to the stock market.

What's wrong with this picture?

[Nevernose]

4. Hell, why don't we put it all on red?

[babylonsister]

5. Wow...

:wow: :wow: :wow: That's about right...