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Ding Dong Goes Your Pension

Written by Gary North on April 16, 2012

Ding Dongs are made by Hostess, which also makes Twinkies. It has filed for bankruptcy.

It has now asked the union to take a shot in the head: radically reduced pension fund contributions from the company: from over $100 million a year to $25 million.

If the union says no, the bankruptcy court will decide who doesn’t get what.

The union has not responded.

What can the union do? It cannot get what it has been promised. So, it has to decide: let the court decide or continue to play ball with management.

All across America, this is going to play out the same way. Companies will declare bankruptcy. That way, the #1 expense — retirement and medical debts — are wiped clean. What can the retirees do about it? Nothing but go back to work.

Companies promised employees big retirements. It was pie in the sky bye and bye. The promises are not going to come true. Bankruptcy is the easy way out.

If a firm goes belly-up, senior managers keep their jobs. They lose their stock old stock options, but they can get new ones after the firm emerges from bankruptcy.  They win.

Retirees get nothing.

Factor this into your retirement plans. Assume that your corporate pension will not get paid.

The more debt the company has, the more likely that you will get stiffed.

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14 thoughts on “Ding Dong Goes Your Pension

  1. PépèreLePew says:

    Zhere ees a vairy easy answer, mon ami. A national retirement plan. It's a good idea like a national health plan is a good idea. Nationalizing basic services that should not be subject to considerations of profit for a minority of stockholdaires in general is a good idea. Proof of that is that they are currently trying to tear down our national health, retirement, and education here in la belle France.

    Yes mon ami, I know that national services like these leave the door open to waste and mismanagement. We citizens have to be vigilant and we users of these services have to be responsible. But it only makes sense, n'est-ce pas, that health care end retirement that are not for profit and not subject to the whims of the market are bound to be cheaper! Call eet "Beeg Government" if you will and condemn it. We call it "Government for the People"! Vive la Révolution!

  2. Better hope the Obama Admx. doesn't get its greedy, big-labor loving hands on this case, otherwise the FAT union pensions and bennies will continue! I used to go into a big bread discount outlet, and the woman said they get 8 weeks vacation (she's at top pay and been there a long time). That's too much, when compared to the pittiful vacations regular workers get. If BHO gets re-elected, "you ain't seen nothin" yet."

  3. By the way, that bread shop is union!

  4. The Feds will have to grab everyone's retirement to pay off the National Debt !

  5. Charles de Ballz says:

    Yes, the government always provides the greatest bang for the buck. LOL. Who are you shittin' mon peu ferret?

    It won't take but a nanosecond for some lawyers, accountants and devilish government bureaucrats to devise their typical schemes of "increasing their retirement". Just as in many state governments, like the nefarious New Joisey style, they increase their last few years of high tenure and base their retirements upon that. Jack up your average earnings, and extort from the American public.

  6. Colonialgirl says:

    I worked for a company that did RIGHT by its employees, the money was set aside every year into an account that the company couldn't tap and it was the FULL amount due according to the rules put in place for the pension fund. I left there in 1979 after 15 years of employment and I started collecting my FULL pension based on my earnings when I turned 65 in 2006. It has been paid without fail every month since.
    The problem is that unions got greedy, politicians had no spines and wanted union votes and campaign funds, plus companies were run by liberals busy filling their own pockets. The public and lower employees in a company got screwed.

  7. Same thing will happen with cities, starting in California.

    It's essentially impossible under state law there to cut benefits, but a bankruptcy court won't have any problem.

  8. If Frenchie above wants us to "be vigilant" while we let government run our pensions, why not let us be vigilant while we each run our own pensions? No union, no big corporation control, no government control, just "be vigilant". Unfortunately, when tried, like in Chile, it works. But when GW proposed it, he was labelled as someone who wanted to push grandma off a cliff and take away our Social Security.
    That was 10 years ago, and now where is Social Security? Still broke, still an unmanageable burden on everyone, still nnot delivering what was promised. Need testing? Well, I needed the moeny when they took the taxes out ofmy paycheck the last 40+ yeasr, now I am told "I don;t need it" because I saved money on my own, so SS is cut. How fair is that? Guess I should have spent it all.

  9. David R. (Canada) says:

    The sooner people start looking after themselves the better they'll sleep at night.
    How many of these stories do we have to hear before those with these pension plans opt out and do it themselves?

  10. David R. (Canada) says:

    You did the right thing. Now you need to protect it from the government thieves.

  11. David R. (Canada) says:

    It won't be enough!

  12. Scott Todd says:

    The same ones who gave us hammers and toilet seats costing hundreds of dollars each can somehow do efficient health care? I want some of what you've been smokin'.

  13. Ernest T says:

    That is why the people need to be in charge of their retirement not the company or the union. Pay the employs everything and let them buy their own retirement and health care. When you stop working no one should still be payed from the present profits. I know this sucks but why did the unions and companies agree to the stupid system they now have.

  14. Ernest T says:

    You have got to be kidding. Get the Government out of our lives and let us keep our property to care for ourselves and our families. That mon ami is what we call freedom on this side of the pond.