Too many of America’s retirees are not having the retirement they expected and was promised to them. Millions of workers generally from another era of our economy — 1950-2000 — chose to work exclusively for a single employer at a lower salary, in exchange for the commitment of pensions and health-care benefits in retirement.
Many of those retirees are now becoming victims of the most cynical type of bait-and-switch as they lose their earned post-retirement health benefits.
Faster than we can count, companies are now reneging on these fiduciary responsibilities and cutting and reducing earned benefits. General Electric is just the latest company to pull the health-care benefits rug out from under their retirees. GE announced that in January 2015 nearly 65,000 retirees will see their health-care benefits cut.
The list of companies that have already cut their retirees’ earned health-care benefits reads like a Who’s Who of Corporate America and includes: General Motors, Time Warner, IBM, and DuPont, among too many others. Sadly, nothing short of federal legislation can prevent these or any other companies from cutting or eliminating benefits retirees earned and already paid for back in their working years.
To battle back and protect themselves, America’s retirees have to do more than just get mad, but take action about the threat to our collective retirement security.
Such efforts have begun to gain traction, as U.S. Senators Elizabeth Warren (Mass.) and Jay Rockefeller recently introduced the Bankruptcy Fairness and Employee Benefits Protection Act (S.2418). This legislation would amend the Employee Retirement Income Security Act (ERISA) and make it more difficult for companies to reduce or eliminate the pension and health-care benefits of their former employees which were guaranteed in their working years.
This important new law would protect retirees by doing the following:
n Require that participants of any health plan be informed of a modification or termination of their benefits and create a legal presumption that guaranteed and promised health-care benefits cannot be reduced during retirement.
n Prevent companies from continuing to abuse the bankruptcy courts to reduce benefits for their retirees and employees unless they can prove the cuts are necessary to prevent a company’s liquidation. It also requires companies in bankruptcy to pay for retiree health-care benefits they committed to for at least two years following restructuring.
n Prohibit corporations and unions from entering into agreements to reduce or terminate health-care benefits of union retirees who retired under previous contracts.
The bottom line is that corporations simply cannot be permitted to continue to renege on their fiduciary duties to America’s retirees; otherwise, U.S. taxpayers will likely be stuck with the tab for their care.
Older Americans, who dedicated their lives to former employers, do not want a handout. The only thing these proud Americans, who worked hard and played by the rules, want is what they have earned and were guaranteed. No more, and no less.
Everyone dreams of a secure, stable retirement. A big part of that security comes from knowing the health-care protections you earned and planned on having are in place and cannot be arbitrarily taken away.
With corporations finding new ways to slither out of their retiree health-care obligations, Congress needs to take action. Washington leaders need to agree that as a nation, we cannot keep putting retiree economic survival issues on the backburner.
James E. Casey is president of ProtectSeniors.Org, a non-profit retiree advocacy organization fighting to protect the benefits of millions of retirees across the United States (www.ProtectSeniors.Org). C. William Jones is president of the Association of BellTel Retirees (www.BellTelRetirees.Org), a 128,000 non-profit advocacy group working to protect the pension and benefits of retirees.