[Mid-October 2005 special pension issue of Substance, Page Sixteen]
By George N. Schmidt

Not a day passed in October 2005 without the front pages of the nation’s business newspapers covering another story about the cutbacks in pension benefits for the nation’s retirees. Men and women who had devoted their bodies and minds to jobs for 30, 35, or 40 years were being forced back to work at low-paying jobs because of the attacks on the pension and medical care rights of Americans by those who currently run the nation, call the shots, and tell everyone through the media what is fact and what is not.

On October 17, 2005, American union members were shocked to read that the United Auto Workers (UAW) union, once the backbone of American labor unions, had agreed to a reduction in medical benefits for retired General Motors auto workers. The reduction is, in effect a cut in GM retiree pensions. In most of the business news articles, no mention was made of the fact that U.S. companies — and school districts — are having trouble with medical insurance benefits because of problems that are uniquely American. The United States is the only major wealthy nation on earth that has overpriced and irrational health care and pharmaceutical industries. Because of the structure of these industries, corporate profits are subsidized by working people. Examined closely, the two industries are designed to create a small class of millionaires and billionaires — among corporate executives and major shareholders — while leaving everyone else bereft of even the simplest medical care. While other major democracies long ago established health care and decent pensions as a human right, in the USA today they only exist as part of the right of the wealthiest people on earth to get even wealthier.

A different viewpoint can be seen a few miles from Detroit, once the auto capital of the USA. Announcing the reduction in retiree health benefits, UAW and General Motors executives cited “global competition.” Auto workers in Canada, however, are more “competitive” in the global economy because Canada’s system of health care does not make billionaires out of health corporation executives while impoverishing working people.

The boards that run pension funds and corporations have been under scrutiny since the stock bubble burst in 2001 like at no time since the beginning of the Great Depression. During the past three years, major corporate boards of directors, both across the USA and in Chicago itself, have been criticized for failing to provide oversight of the executives they approved to run billion dollar corporations. Recently, directors of the Hollinger International Corporation (including former Illinois Governor James Thompson) were publicly criticized for allowing corporate officers to loot the corporation they were charged with overseeing to the tune of nearly half a billion dollars. Not a day goes by without another report of a corporate executive tried or entering prison for cheating the rest of us out of millions or more.

Over the past decade, the attacks on the livelihoods of working people have been pronounced in the private sector, as corporate executives have rewritten the laws to allow many of the practices that were once illegal. When unions at corporations like United Airlines agreed to a series of deferred compensation packages throughout the 1990s, it was in exchange for promises that the money would be available in the future, when pilots became too old to fly and those working on the ground became too old to do their jobs as efficiently. Defined pensions were part of those agreements.

But a revision in the bankruptcy laws allowed executives to renege on pension plans and other agreements, taking money away from those who had contributed. the United Airlines saga — from “Employee Stock Ownership” in the early 1990s to pensions in the 2000s — is just one example. Now General Motors and the UAW are another.

While public sector pension plans have been under some attack in recent years, they have generally escaped the attacks suffered by the private plans like those at United Airlines and now General Motors. The same people who looted the pensions of those who devoted their working lives and healthiest days to outfits like Bethlehem Steel and United Airlines are now eyeing the great pension funds that have been accumulated for teachers, civil servants, and other government employees. Even veterans have faced major cutbacks in benefits since the Bush administration took over.

Chicago’s teacher pension fund is one of the most solvent and prudently run in the United States. Its trustees proudly state that in 108 years they have never missed a pension check to a retired teacher.

But the future health of the fund is only as strong as those guarding it, and the front line of defense against political and private sector raids on the teachers’ pensions in Chicago consists of 12 people — the trustees of the Public School Teachers Pension and Retirement Fund of Chicago.

On October 28, 2005, the majority of those people are being elected (or, in many cases, re-elected) by the two largest groups in the fund, the teachers (who are voting for four trustees) and the retirees (including retired teachers and retired administrators and principals) who are electing three trustees.

By the time the votes are counted after the October 28 balloting, a great deal will have been decided about whether Chicago’s teachers will one day awaken, when they are too old to carry on in their classrooms, to read in the newspapers that their retirement, like those of auto workers now too old to keep up with assembly lines, have been cut back. �