Massive stock crashes like Enron and Global Crossing decimate employees' 401(k) retirement plans. Bankruptcies like LTV reveal inadequate pension reserves, leaving thousands of retirees with a mere fraction of the pension they had earned. Meanwhile, the Bush administration continues to pursue attempts to privatize Social Security, exposing even the most basic of retirement accounts to the whims of the stock market.

These events may seem different, but they all have the same result: taking the security out of workers' retirement. And they're all targets of the AFL-CIO's national 'No More Business as Usual' tour.

Executive vice president Linda Chavez-Thompson leads the tour into the Twin Cities April 29 with a town meeting at 7 p.m. at the CWA Local 7200 hall, 3521 E. Lake St., in Minneapolis. The meeting is open to the public. The goal: Raise awareness about protecting retirement security and making sure corporate abuse does not rob your future.

Seeking stronger 401(k) protections
The focal point of the meeting is fighting future Enrons. Former workers will tell how they lost hundreds of thousands of dollars in retirement funds because Enron overloaded its 401(k) plan with company stock. As Enron stock crashed amid revelations of financial chicanery, the plan became virtually worthless - but rules prevented rank-and-file workers from unloading shares before it was too late.

The meeting will highlight ways to fight back, including safeguards such as Senate Bill 1992. The legislation - sponsored by Senators Edward Kennedy, D-Mass., Paul Wellstone, D-Minn., and others - gives workers more rights in controlling their own 401(k)s.

The bill would expand the ability of workers to sell company stock in such plans, warn workers when top executives are selling their company stock, and limit administrative lockouts - those periods when employees cannot sell stock from their 401(k)s.

Bankruptcy dooms LTV retirees
As LTV retirees can tell you, workers with 401(k)s and other 'defined contribution' retirement plans aren't the only ones at risk. The former steel industry workers are losing up to 60 percent of their monthly checks because LTV failed to maintain adequate pension reserves for its 82,000 active and retired workers.

LTV's new owner refused to assume the pension liabilities, forcing the largest federal pension takeover ever. The Pension Benefit Guarantee Corp., a government 'insurance' program, assumed control of LTV's three pension funds March 29, after it was discovered the funds had only $2.2 billion in assets, about half of what is needed.

Though the takeover guarantees at least some pension for current and retired workers, amounts will be far less than workers had expected. For current LTV retirees, the takeover is a double whammy: The cut in pension benefits coincides with the March 31 loss of health-insurance benefits, which LTV reneged on after declaring bankruptcy.

Social Security in the balance
Meanwhile, the largest specter over retirement security is the Bush administration's plan to private Social Security. The president's Social Security Commission - hand-picked to include only members who favor private accounts - has proposed three options allowing American workers to divert a portion of their weekly Social Security withholding taxes into private accounts.

Each option, however, would reduce monthly benefits for future retirees, raise mandatory retirement ages, and drain money from the Social Security Trust Fund, according to independent analysts. The diversion would be as much as $1 trillion over the next decade and almost $3 trillion over the next 20 years. That would exhaust the Trust Fund by 2024, according to the analysts, 17 years earlier than current projections.

AFL-CIO president John Sweeney calls the privatization idea 'a radical plan to dismantle Social Security. The drastic recommendations adopted by the 16-member commission will bankrupt our nation's most effective family protection program and jeopardize the future of the federal budget,' he said.

From the April 24, 2002, issue of The Union Advocate newspaper. Used by permission. The Union Advocate is the official publication of the St. Paul Trades and Labor Assembly. E-mail The Advocate at: advocate@mtn.org

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