Employee Pension Funds

Per the New York Times, pension reform has been one of the most contentious issues of state and federal legislative reviews this past year. Public and private entities have not been adequately contributing to their pension funds and now have severe losses. One case in point is Chicago who has estimated $139 billion in obligation with only $85 billion in resources that have been set-aside.

Financial Crisis Made Matters Worse


Money needed to fund employee pension funds comes from three sources: contributions by the employees, contributions by the employer, and investment returns. As Wall Street profits soared, pension-fund earnings grew and many funds took advantage of what turned out to be a temporary windfall that was not sustainable.

Two signs that pension woes are not going away anytime soon is Seeger Weiss’ representation of employees of Entemann’s and other unionized bakeries, as well as news about Eastman Kodak’s bankruptcy proceedings to lower their pension-fund responsibility among relieving other debt. Both cases are very different and are based on different pension benefit plans.

Unionized Bakeries Golden 80 Plan

Plan participants can qualify for full pension benefits by adding their years of service to their age. Once these figures total 80, they are eligible for full pension benefits equal to what they would be eligible for at age 65. For example, a 50-year-old participant who has worked as a Union employee for 30 years would qualify for a full pension.

Kodak Cash-Balance Pension Plan

In a cash-balance design, employers make annual contributions to an account in an employee’s name, which earns interest at close to the rate of long-term Treasury bonds. This method transfers risk from the company—which under a pension plan is wholly responsible for funding a retirement—to the employee. Another negative of this pension fund is the fact that younger employees are favored and older employees suffer. Hopefully, the association of Kodak retirees, EKRA, can protect the interests of Kodak retiree’s pension benefits and health care benefits during bankruptcy proceedings.
If you or a loved one have been illegally cheated out of your pension benefits, contact Seeger Weiss. Also stay up with what happens in the Entemann’s case via our News page.

Call Us Toll Free:

888-584-0411