EDITOR: Your Tuesday editorial (“Nation's other retirement problem”) didn't completely address America's pension dilemma. Because the Internal Revenue Service allowed corporate America to underfund the pension promises it made employees, American corporations collectively built up a huge (in the hundreds of billions of dollars) unfunded liability.
But not to worry. With the stroke of a bankruptcy judge's pen, that corporate debt evaporates, leaving thousands of helpless retirees twisting in the wind.
I know. Two of my pensions disappeared that way. Pan Am's huge pension obligation caused it to become toxic, and it disappeared from the face of the earth. On the other hand, when Delta Air Lines shed its pension obligations, it was able to become competitive again, and its stock is soaring into uncharted heights.
The retirees' only hope is the Public Benefit Guarantee Corporation, which makes up some of the loss and, of course, is funded by the U.S. taxpayers.
My question is: Why is this allowed to happen, yet somehow public employee pensions are sacrosanct, no matter how onerous or disastrous the results may be?