 Ontario facing $400-million bailout over pensions at U.S. Steel CanadaBusiness | 206718 hits | Sep 18 10:17 am | Posted by: N_Fiddledog  Government faces potential bill if ailing steel maker can’t restructure around a $838.7-million solvency deficitCommentsview comments in forum Page 1 2 You need to be a member of CKA and be logged into the site, to comment on news. |
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Besides, who the hell buys out a country's largest steel producer just to shut it down 3 years later? Except maybe in a bid to kill Canadian production, ie; the competition.
Hate to say it but we'd have probably been better off if the Russians had ended up with it.
I think one Hamilton Spectattor reader's comments summed it up perfectly:
Good crystal ball. The story says that the parent company gave it bail out money to operate till 2015, which co-incidentally is when the second agreement that USS made with Harper to keep Canadian operations running, runs out.
Embrace. Extend. Extinguish. Seems to be a resonating corporate theme lately.
The facts of the global economy are ending the notion of a union job with lifetime income and benefits.
I can see this being replaced with a retirement account that follows a person from place to place regardless of their employer. The only problem with this is keeping the greedy mitts of government off of these accounts. Statists hate the idea of money that they can't use to buy votes.
In none of the info provided here do I see why or how Ontario is on the hook. When these deals are made, govt should insist that the parent company is liable for all costs, so they can't dump the problem on govt and run. The cleanup costs, say. The pension I still don't see why Ontario has to assume those.
I don't think the gov't is on the hook. They don't have to pay up if USS walks out on the pensions.
That's doesn't mean they (meaning we the Ontario taxpayer) won't pay.
The pension I still don't see why Ontario has to assume those.
In Ontario, there is something called the Pension Benefits Guarantee Fund, which is like insurance for Pension Plans in case the employer goes defunct. It covers the lesser of 50% of your monthly pension or $1,000 per month.
Just goes to show that businesses are not social programs. They do not ever exist for the purpose of providing employees with life-time incomes and benefits.
The facts of the global economy are ending the notion of a union job with lifetime income and benefits
Once again you miss the mark. It's one thing for a company to say it won't offer a pension to employees, it's quite another thing for a company to promise you a pension after a long career, and then when you retire, they tell you to fuck off. It's no different than if you were hired to do a job for $20 an hour then after doing the work, payday comes and the employer says "we're only going to pay you $5 an hour".
In North America, as with most western countries, retirement income is based on the "three-legged stool" principle:
- Government benefits (Social Security/CPP/OAS)
- Personal Savings (RRSP)
- Employer penison/savings (RRSP or Pension/401k)
Claming that employer-sponsored plans are a "social program" is not unlike saying paying employees a salary or wage is a "social program". It's meant to be part of the core compensaiton - you get paid x dollars in cash, plus y dollars in retirement funds. Some how the neo-cons have convinced the world that retirement funds are somehow a "gold-plated perk"
I can see this being replaced with a retirement account that follows a person from place to place regardless of their employer.
The US has 401ks and canada has DC Pension and RRSP's, but most employers require you to open an account with their providers and financial institutions. It's just too difficult for an employer of any size to track and make contributions to all these different financial institutions. For example, how would they be able to confirm that the non-taxed retirement contribution is being deposited in an eligible retirement account and not simply a normal personal bank account? Company may have liability there if the employee takes a tax hit.
Also, all the research shows that RRSP/401k/DC Pensions fail because the general public isn't sophisticated enough to manage their investments....there's a reason why investment consultants are high-priced and company spend big bucks to hire them for their pension plans. If anyone could do it, these high priced consultants wouldn't exist. Not only that, but personal savings accounts charge extremely high fees, which they take out of your investment returns. They charge individuals several times what they charge an employer. So if your investments actually earned a 5% return, your account will only reflect a return of 4% for example. Similarly if it lost 4% your account would show that it lost 5%. That money addes up over your career - saving just 1 per cent on investment fees could save you $400,000 over 25 years.
The only problem with this is keeping the greedy mitts of government off of these accounts. Statists hate the idea of money that they can't use to buy votes.
Governments don't have 'their mitts' on any private pension plan accounts.
Steelworker union Local 1005 says the recent court filings by U.S. Steel is “bankruptcy fraud” and a path to abandoning Hamilton altogether—not only ditching the liability of its pensioners, but the cleanup costs of leaving the city, too.
Union head Rolf Gerstenberger made the statement at Local 1005’s headquarters at Barton and Kenilworth, questioning the company’s motives, repeatedly recalling a $58-million settlement U.S. Steel was has agreed to pay for price-fixing case in July for actions dating back a decade, and calling the process of bankruptcy protection theft.
“It’s an unconscionable scam from A to Z, and Local 1005 is not going to remain silent on any of it,” Gerstenberger said to a crowd of some 75 union workers, as well as MPP Paul Miller (Hamilton East-Stoney Creek) and Mayor Bob Bratina.
During Thursday’s question period in Ottawa, Hamilton Mountain NDP MP Chris Charlton asked if the federal government would change bankruptcy laws to put pension obligations at the top of payout list. It was a question Conservative MP Keven Sorenson, the Minister of State for Finance, ignored and answered their government hoped to create a “respectable retirement” for Canadians, but did not address where pensions fit in a bankruptcy payout pile.
http://www.cbc.ca/news/canada/hamilton/ ... -1.2770980
Once again you miss the mark. It's one thing for a company to say it won't offer a pension to employees, it's quite another thing for a company to promise you a pension after a long career, and then when you retire, they tell you to fuck off. It's no different than if you were hired to do a job for $20 an hour then after doing the work, payday comes and the employer says "we're only going to pay you $5 an hour".
In North America, as with most western countries, retirement income is based on the "three-legged stool" principle:
- Government benefits (Social Security/CPP/OAS)
- Personal Savings (RRSP)
- Employer penison/savings (RRSP or Pension/401k)
Claming that employer-sponsored plans are a "social program" is not unlike saying paying employees a salary or wage is a "social program". It's meant to be part of the core compensaiton - you get paid x dollars in cash, plus y dollars in retirement funds. Some how the neo-cons have convinced the world that retirement funds are somehow a "gold-plated perk"
The facts of the global economy have obviated North American labor traditions. Like it or not.
The US has 401ks and canada has DC Pension and RRSP's, but most employers require you to open an account with their providers and financial institutions. It's just too difficult for an employer of any size to track and make contributions to all these different financial institutions. For example, how would they be able to confirm that the non-taxed retirement contribution is being deposited in an eligible retirement account and not simply a normal personal bank account? Company may have liability there if the employee takes a tax hit.
Also, all the research shows that RRSP/401k/DC Pensions fail because the general public isn't sophisticated enough to manage their investments....there's a reason why investment consultants are high-priced and company spend big bucks to hire them for their pension plans. If anyone could do it, these high priced consultants wouldn't exist. Not only that, but personal savings accounts charge extremely high fees, which they take out of your investment returns. They charge individuals several times what they charge an employer. So if your investments actually earned a 5% return, your account will only reflect a return of 4% for example. Similarly if it lost 4% your account would show that it lost 5%. That money addes up over your career - saving just 1 per cent on investment fees could save you $400,000 over 25 years.
Yet this exact program works just fine in Chile.
http://en.wikipedia.org/wiki/Pensions_in_Chile
The only problem with this is keeping the greedy mitts of government off of these accounts. Statists hate the idea of money that they can't use to buy votes.
Governments don't have 'their mitts' on any private pension plan accounts.
Cyprus arbitrarily seized portions of private savings accounts and five European countries have also seized retirement funds for general spending purposes.
http://www.csmonitor.com/Business/The-A ... e-pensions
The facts of the global economy have obviated North American labor traditions. Like it or not.
What facts are those? That the 1% are now taking everything for themselves so everyone else has to do more with less?
Yet this exact program works just fine in Chile.
Sounds like this is Social Security or CPP, just with private companies managing the money. All employers and employees must contribute by law, with contributions being 10%.
I also note that it says the following, which is right in line with what I said above:
The performance of the Chilean pension funds is not very good compared with the performance of private pension funds of developed countries, but that performance is partly attributed to special factors. Also the expectable amount of benefits not only depends on the performance of pension funds but also on the amount of withdrawn administrative costs. The amount of administrative costs is considered a problem of the Chilean pension system.
Well, Cyprus is only a semi-developed country. I can't imagine anything like that happening even the US. Also note that wasn't government taking money for themselves, that was BANKS taking money for themelves. The governnment was just a puppet....so not statist, CORPORATIST