From: ww%nyxfer%igc.apc.org@MIZZOU1.missouri.edu (Workers World Service)
Subject: Bosses Axe Retirees' Pensions
Followup-To: alt.activism.d
Originator: daemon@pencil.cs.missouri.edu
Organization: The NY Transfer News Service
Resent-From: "Rich Winkel" <MATHRICH@MIZZOU1.missouri.edu>
Date: Sat, 2 Jan 1993 22:47:05 GMT


Via The NY Transfer News Service * All the News that Doesn't Fit


BOSSES AXE RETIREES' BENEFITS

By Lyn Neeley

As 1992 ended, over 50 major companies terminated medical
insurance for retired employees and/or cut future retirees'
benefits. It was another drastic blow to workers' health care.

On Dec. 25, Primerica Corp.--previously American Can Co.--forced
7,800 former employees to choose between  paying for the benefits
themselves or losing their health insurance altogether. Workers
were given only three weeks notice.

Most workers' health insurance costs over half their pension. For
Marie Esposito, an executive secretary at American Can Co. for 19
years, insurance would cost $144 of her $240-per-month pension.
Without insurance, she would pay $177 for her blood pressure and
stomach ulcer medicine instead of the $17 she has paid up to now.
(New York Times, Dec. 24)

The companies are using a new accounting law as an excuse to
justify these cuts. Financial Accounting Standard 106, effective
Jan. 1, will require companies to subtract the cost of health
care for former employees and benefits promised to future
retirees from year-end profits. The new law is supposed to
reflect firms' real liabilities so investors and securities
analysts have better information.

Although there is no actual increase in expenses, companies like
General Motors will show a $16 billion to $24 billion loss on the
books. Ford Motor Company will be forced to subtract $7.5 billion
from its claimed earnings this year. But neither company will pay
out more cash.

The benefits consulting firm A. Foster Higgins reports that large
companies pay an average $2,345 annually for each retiree.
Primerica's costs averaged $1,115.

CHIEF EXECUTIVE GETS MORE THAN ALL RETIREES COMBINED

In 1991, Primerica spent less on health care for its 7,800
retirees then on the compensation package for the chief
executive, Sanford I. Weill. In 1992 it spent less than 2 percent
of its profits on retiree benefits.

Cathy Ventrell-Monsees, a workers' rights manager at the American
Association of Retired Persons, criticized the companies' cuts.
She said for companies "to come out in this last quarter of 1992
and say, `We are compelled to eliminate benefits because of FAS
106 accounting' is the weakest excuse for hurting people just to
save money."

U.S. Rep. Ron Wyden of Oregon, who sits on the House Select
Committee on Aging, requested a General Accounting Office
investigation into the cancellation of benefits. Wyden said, "My
sense is that we're going to see more and more scheming to use
FAS 106 and other accounting sleight of hand to dump seniors and
get out from under paying health benefits."

A group of retirees filed a class-action suit in 1989 to block
Primerica from raising their monthly premium from $5 to $50. The
case, dismissed in 1991, was appealed and is again under
consideration. The company promised workers a $5-a-month medical
package and $10,000 in life insurance for the rest of their
lives. The retirees are demanding Primerica be forced to live up
to the terms of the agreement.

                               -30-

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