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     Unlike the government, business leaders have the leeway to make tough choices about their expenditures and the financial health of their companies. Thats important as the government-backed Pension Benefit Guaranty Corp., which insures private companies programs, is straining to cope with giants like airlines and steel companies defaulting on their payments to workers. The Wall Street Journal reported January 18 on legislation Congress is considering that would lift some regulations and allow businesses to restructure their pension plans even more, in the interest of preventing the underfunding problems many face.

     Alcoa Inc. (NYSE: AA), a leading aluminum company, joined IBM (NYSE: IBM) as the latest in announcing a move toward defined-contribution retirement plans, like     401(k)s, from defined-benefit plans, which are guaranteed to pay a certain sum to workers for life. According to the Bureau of Labor Statistics (BLS), just 21 percent of private industry workers were in defined-benefit plans as of 2004. Forty-two percent were in defined-contribution plans. Contribution-based plans usually offer portable savings that workers can take with them especially helpful considering a BLS study of baby boomers, which showed they changed jobs an average of 10 times between the ages of 18 and 38.


Personal Responsibility 1, Welfare State 0
     Bankrupt companies like Delphi obviously cant pay for their pensions, but even financially healthy companies are deciding that to stay in business they must shift more responsibility to workers.

     Does that mean, as Miles OBrien said on the January 17 American Morning, that were all going to be greeters at Wal-Mart some day? Later on the show Andy Serwer warned: If you work for a big company and you have a very generous pension plan, watch out, because there is writing on the wall. Soledad OBrien rejoined: Youve got a bulls-eye on you.

      But another CNN regular, Jack Cafferty, acknowledged the shift as a fact of life, even a positive. On January 14, Cafferty asked a guest on In the Money: Whats wrong, though, with putting more of the onus for this retirement thing on the individual?

     ABCs Betsy Stark saw plenty wrong with it, declaring workers vulnerable on the January 8 World News Tonight. Traditional defined benefit pension plans are a vanishing piece of the American dream, Stark said, adding that Workers at all levels - from the rank and file to management are vulnerable, especially if they work for old-line industrial companies with union workers. She concluded with, Certainly not the retirement they planned for.

     Planning is the key, but it must be realistic. David John, a research fellow at The Heritage Foundation who studies retirement policy, said that the problem with most of the media reports and the view people have of defined benefit plans is that theres no risk. People can see the risk when they look at their own 401(k) or the stock market, he said, but for some reason they think having their company take care of it takes the risk away. Thats simply not true. The risk is present, whether its a company managing funds or the government spending Social Security dollars.

     Despite that truth and companies need to stay in business to provide jobs for their workers, CNNs Lou Dobbs added IBMs announcement to his War on the Middle Class series. On the January 6 Lou Dobbs Tonight, he proclaimed middle class Americans facing a new attack on their standards of living. Even their pensions under assault. He reminded viewers that IBM is one of the largest most profitable corporations in the world, recording almost $100 billion in revenue last year. But this company still says it needs to cut costs by ripping up a key financial contract with its middle class work force. This is just the latest firm to go back on its pension promises.

     Christine Romans also lamented the loss of solid, dependable pensions for IBMs loyal workers, calling them the pensions that helped build the American middle class.    

     But John said this isnt an attack on the middle class. This is really pulling back the curtain to reveal the reality behind the pension plans theyre underfunded and companies cant maintain the level of benefits they once thought possible. The pension system today assumes that a company is going to be in business forever and that its going to be contributing X dollars to its plan every year, John said. But workers cant base their futures on that assumption.


Public Benefits, Public Bailout
     Private-sector workers may be taking more responsibility for their futures, but government employees are enjoying more benefits thanks to taxpayers. CNNs Andy Serwer cited a new study on the January 17 American Morning saying that over the past four years, government employees pension benefits have grown 37 percent. USA Today reported on January 16 that that figure applied to state and local workers, according to the U.S. Census Bureau.

     Taxpayers could also be on the hook for some private pension plans that go belly-up. The Pension Benefit Guaranty Corp. (PBGC), which insures private companies pension programs, is well over $100 billion under-funded, John said. That means if enough companies cashed in on the PBGCs obligations, there would have to be a taxpayer bailout. And thats only private pensions in addition to the government workers taxpayers already support, 90 percent of whom have a defined-benefit pension. To make matters worse, the PBGC will need more money about the same time Social Security does, John said.

     What to do? John said the country faces two responsibilities. First, because one in five private-sector workers has a defined-benefit pension, the companies and the unions cannot add more pension promises unless they have the money to pay for them. Secondly, he said all workers must have the same opportunity to enroll in an individual retirement savings account.


Minding Your Own Money
     Of course, the media treat the American worker with skepticism, especially when it comes to managing money. Even Fox News, which generally gives more balanced treatment of individual responsibility, took the workers-out-in-the-cold line. On The Big Story January 6, John Gibson said: It sounds like these big companies are basically trying to put workers out on their own. You know, forget pension plans from us. You got your 401(k), youre on your own.

     Noting that companies have obviously had trouble funding their pension plans, Gibson added the kicker: Well, if the big, smart guys at the big corporations cant figure out how to make these investments pay off the guaranteed number down the road, how is the little old schmo with his 401 supposed to figure it out? But correspondent Dagen McDowell reported that about 75 percent of workers with access to 401(k)s participate in them. Though she emphasized that that meant a whole quarter of employees arent participating, she could have taken the approach that only a quarter of workers need to join the crowd.