by JACK RASMUS
And while we’re at it, let’s not forget what happened to Pensions under Reagan. Reagan shoved through rules that gave birth to 401k privatized pensions. And it was under Reagan that new rules also allowed companies to skim off the surplus in traditional defined benefit pensions. Reagan ruled that pensions no longer represented workers’ deferred wages, but were now the property of the company to do with it what it wanted Exxon helped pay for its Valdez oil spill with $1.6 billion of its employees’ pension surplus. Good year tire skimmed off $400 million. United Airlines $287 million it never put back, hastening the eventual bankruptcy of the plan. Not least, in 1983 Reagan approved rule ’83-52’ which allowed a corporation to terminate its pension plan entirely and distribute it however it pleased. This gave rise at the time to corporate ‘raiders’ taking over companies just to get at their cash rich pension plans—made famous in Oliver Stone’s award winning film ‘Wall Street’ at the time. Over Reagan’s term defined benefit pension plans were replaced by 401k plans at an accelerating rate, beginning a process continuing to this day. Tens of thousands of defined plans were terminated, replaced by companies with cheaper cost, and no liability, 410k plans, the latter of which rose from zero in 1981 to several hundred billions covering tens of millions of workers by the end of Reagan’s term.
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