Hostess Maneuver Deprived Pension (took workers' pension money to fund itself)

[kpete]

Source: Yahoo

The maneuver probably doesn't violate federal law because the money Hostess failed to put into the pension didn't come directly from employees, experts said.

"It's what lawyers call betrayal without remedy," said James P. Baker, a partner at Baker & McKenzie LLP who specializes in employee benefits and isn't involved in the Hostess case. "It's sad, but that stuff does happen, unfortunately."

...........

For example, John Jordan, a union official and former Hostess employee, said workers at a Hostess factory in Biddeford, Maine, agreed to plow 28 cents of their 30-cents-an-hour wage increase in November 2010 into the pension plan.

Hostess was supposed to take the additional 28 cents an hour and contribute it to the workers' pension plan.

Read more: http://finance.yahoo.com/news/hostess-maneuver-deprived-pension-051400720.html

[Laurian]

1. Sure sounds like theft to me. n/t

[FreeBC]

2. It's Fraud. The executives looted their pensions.

Those executives should go to jail.

[aquart]

3. A law needs to be passed to hang them for this. NO REMEDY?

But they get their cursed bonuses? (May whatever they buy with those bonuses kill them.)

[Iggy]

4. And...... WAIT For it... Guess WHO gets to pay these worker's pensions

if Hostess, in grand "free market" style decides to default on paying their worker pensions??

Tah dah!! yes, we the taxpayers will pay those pensions, via the Pension Benefit Guarantee Program.

Sweeeeeeeeeeeeeeet, eh?

[antigop]

5. no, the taxpayers do not fund the PBGC...it's funded by premiums that corporations pay

explained here:
http://www.democraticunderground.com/?com=view_post&forum=1002&pid=1957181

The corporations who offer defined benefits pension plans pay premiums to the PBGC. The PBGC is NOT funded by general revenue. Think of it as insurance that the corporations pay.

[Wellstone ruled]

6. Been there done that and

they even screwed us out of our T-shirts. This shit started with White Motor and what was called Minneapolis Moline in the 1960 s. This issue of Employees getting screwed at the behest of their managers has never really been tried in the Court of law. Delaware has a bunch of bogus bankruptcy laws,that is why companies incorporate in Delaware. ERISA was formed basically to protect Corporations from you and I. Companies steal 100% of the Pensions and the Employees get 10% of what they are due. What a scam. Yes,I'll admit,there are a few Democrats whom helped pass laws to f---up the working folks.

[patrice]

7. WHY is this not theft?

[Common Sense Party]

19. It's a lousy, crappy thing to do, but it's not "theft."

This story, as written, is misleading: "money taken out of workers' paychecks"...no, it wasn't.

I do not believe, based on other reports, that Hostess took employee 401(k) deductions out of their paychecks and then diverted that to company expenses. That would be a big time ERISA violation and they'd be in deep guano.

What they did was take corporate profits that had been set aside as future pension contributions and they diverted them to try to keep the company afloat. It's a lousy thing to do, especially since they probably had all the executive bonus money stashed away in a separate, golden lock-box ledger. But it's not criminal. Unethical, slimy, despicable? Yes. Criminal? It's be tough to find a judge that would say it was.

[RedstDem]

8. Just like back when people fought for the right to organize

it's time we "took out the trash"....

[Sheepshank]

9. Breach of contract at the very least

these employees may or may not have chosen to move to another job had they realizes that the agreement for Hostess to put money into a pension was not valid or enforcable or even non existent. Had the company been truthful with the employees about their struggling finances, perhaps the employee would have taken an early withdrawal and paid the penalties rather than get nothing.

Corporations are the biggest asshole types of persons, Mitt.

[socialindependocrat]

10. Pension money should be sacred

I think that all money that has gone into a pension fund should stay - no matter what.

If it is invested and considered "over funded" it should all stay.

And if a company decides to close - all money should be reconciled with th pension fund before
any goes to other creditors.

All these pension default problems just come back on the tax payers and then the republicants
use it against all the "entitlement" programs with their propaganda.

[yardwork]

11. And the executives are giving themselves multi-million dollar bonuses as the company dissolves.

This needs to be made illegal.

[Downwinder]

12. Had to fund executive bonuses from somewhere.

Last edited Tue Dec 11, 2012, 07:40 AM - Edit history (1)

[Tx4obama]

13. Kick! n/t

[JDPriestly]

14. If there was an agreement that 28 cents of the 30 cents per hour wage rise

would be placed in the pension fund, is the 28 cents actually the worker's pay, simply deferred pay owed by the employer?

[Festivito]

15. I'll take your money and give it to me. What buffoon of a judge can't see through that?

[Joe Bacon]

16. Why every judge who belongs to the Federalist Society!

Thanks to the Three Stooges--Pruneface Reagan, Old Fart Bush and Dumbya, the courts are packed with Federalist Society rubber stamps who whore 24/7 for their corporate pimps.

[bemildred]

17. It's not a "maneuver", it's deceit, it's lying, it's fraud. nt

[Trillo]

18. JPBaker said, "that stuff does happen"

Sounds like a long-term problem needing a solution. Perhaps all employer pension contributions need to be sent to a third party. Campaign contributions from big corporations undoubtedly get in the way of solving this.

It's curious that our system demands "the presumption of innocence", when the accumulated funds of many people are continually abused by the few (corporations).

Anyone in the military who took their honor code seriously could never work for a private employer until that employer first proved their integrity. In this system that we have, the employer doesn't apply to workers, rather, the worker applies to the employer, meaning the potential worker must prove themselves to the employer. This is reversed from how it needs to be. The presumption of innocence, when it comes to very wealthy entities, seems to be the biggest con game going.

Perhaps the accumulation of great wealth, or its concentration in corporate structures, needs to be viewed as "probable cause", clearly suspicious activity, indicative of as-yet-undiscovered fraud.