Retirement is the good life, (believe me I've looked into it, early bird specials and discounts at the movies are just a few of the perks). But the good life has recently been threatened by the retirees former employers filing for bankruptcy. What has been happening when these big companies restructure under bankruptcy is the either cut benefits for retirees or drop them entirely.
Companies will drop retirees benefits because it makes the most sense from their perspective, these people no longer work for them. Those days may be over if labor unions get their way in the Senate. There is a proposed bill called The Protecting Employees and Retirees in Business Bankruptcies Act, that will make it more difficult for large companies who file for bankruptcy to dump retirees benefits.
This has been a major concern for labor unions as many have been hard hit by this practice. Some notable examples include Delphi Corp., a car parts manufacturer which shed the health benefits of 15,000 retirees, and General Motors which cut two thirds of the health benefits of 122,000 former employees.
Additionally, the proposed bill is set to take aim at the compensation that upper management receives when the company goes into bankruptcy. The bill looks to curb the amount of stock some executives receive as well as to expand the number of employees subject to previous restrictions on bonuses.
Those against this bill are pointing out that one of the provisions allows for unions to go back to court to reopen consensual agreements on wages whenever there are changes in circumstances. They claim that to allow this would make it extremely difficult to secure exit financing for a business plan when there is no certainty with labor costs.
It would be great to get some protection for retirees who went into retirement with the expectation that their insurance needs would be covered. Its tricky to balance the needs of retired workers and the need for companies to restructure and save their business. Which side wins out is anyone's guess, but the important thing to take from this proposed bill is that there is some effort at addressing the short stick many retirees get dealt.