Pension Benefits

If you're like many 20-somethings, you're shouldering thousands of dollars in student loans, carry a balance on a credit card and try to make ends meet on an entry-level salary. So the notion of saving and investing - especially for retirement - may seem impossible or something to push off. But you may be in a better position than you know. Twenty-somethings have an asset that can be more valuable than cash: time. Money invested today - even small amounts - can grow into big sums over decades.

CHICAGO -- UAL Corp.'s United Airlines, the world's largest airline, reached a tentative first contract yesterday with its newly unionized ticket agents and reservations clerks, who are among the industry's lowest-paid workers.The one-year agreement with the International Association of Machinists would give the roughly 19,000 service workers improved pension benefits and a 5.5 percent raise as of April 13, 2000. It also would eliminate a separate, lower pay scale for workers hired after UAL's 1994 employee buyout.

An agreement to allow Baltimore Public Works Director George G. Balog to remain on the job through Jan. 3 will allow him to receive an estimated $1,800 a year in additional city pension benefits, city records show.Noting his campaign pledge to "change and reform" city government, Mayor Martin O'Malley had said that Balog would not be retained past his Dec. 7 inauguration. But O'Malley said yesterday that he was forced to reconsider his stance in the absence of a new public works director and potential Y2K computer problems.

An election-year bill that would significantly increase pension benefits for state workers and public school teachers cleared its first hurdle last night when the House Appropriations Committee approved the measure.The legislation, which is sought by the Maryland State Teachers Association and state employee labor unions, would increase the state's cost of funding the pensions by about $167 million a year, or about $3 billion over the next two decades.Under the plan, employees and teachers would be required to contribute to their retirement plans.

House OKs improved state pension benefits for workers, 0) teachersBy an overwhelming margin of 109-9, the House of Delegates approved yesterday election-year legislation that would significantly improve the pension benefits of thousands of state employees and teachers.The measure, which is backed by Gov. Parris N. Glendening, goes to the Senate, where its prospects are uncertain.The bill, HB 987, would increase the state's cost of funding the pensions by about $167 million a year, or about $3 billion over the next two decades.

Judy Rumpf knows she is fighting an impossible battle against a group of women regarded as sacrosanct in Baltimore.The 49-year-old widow of a city police officer killed two decades ago is against a proposal that would allow the surviving spouses of officers and firefighters killed in the line of duty to keep pension benefits after they remarry.Rumpf says that allowing remarried widows to retain the benefits is like accepting "blood money." She plans to face off against other widows at a hearing scheduled for tomorrow at City Hall.

THE bull in the state's fiscal china closet this legislative session may be the massive pension boost that state employees and public school teachers are seeking.Under the present pension system, after 30 years, an employee making $34,000 a year receives $10,000 annually upon retirement. Under the improved plan, that pension would be increased to $15,000 per year. Assuming Social Security benefits and possible income from savings, future retirees would replace a sizable portion of their income.

Maryland's public school teachers and state employees have among the very lowest pension benefits of any state in the nation, a situation some state officials are trying to improve.A comparison by the Maryland State Retirement Agency found that the pension plan covering most state workers, teachers and some other local employees provides the lowest retirement benefits of 47 state plans for teachers surveyed, and next to last among 46 plans for nonteaching employees."What we found out was pretty disturbing," said Peter Vaughn, the agency's executive director.

POLICE UNION OFFICIALS in Howard County say their members are leaving the force because the County Council this year rejected a proposal to improve pension benefits for officers.That is only part of the story. Although 12 of the 26 officers who have left over the past 15 months went to law enforcement agencies elsewhere, others have either retired or moved on to other careers.Indeed, a dozen officers have left for other departments, and more may follow. This is an unusually high number, but so-called lateral moves by police officers from one jurisdiction to another is hardly unusual.

When BethShip Inc.'s workers voted on their last contract in 1995, they had two choices: a 20-cent an hour wage increase or improved pension benefits.The vote wasn't even close: The workers voted overwhelmingly for a better pension."I think it was primarily because of age and seniority," said Lonnie Vick, executive secretary for the Industrial Union of Marine & Shipbuilding Workers of America local that represents the yard's 800 workers, including about 100 who had been laid off.He estimated that the average worker was 45 with 20 years of service.

Baltimore police officers and firefighters can't keep on receiving the lucrative pension benefits now paid to retirees. The numbers work against them. Police and fire retirees are living longer, which means the city has to pay out much more over the long haul, and other aspects of the pension deals are costing more, too. Poor performance in the stock market has compounded the problem for everyone and put the city on the hook for $82.1 million in the fiscal year that begins in July and a whopping $110 million the next year.

For years, Baltimore police officers and firefighters have been the beneficiaries of a pension formula tuned to make them happy. When stock prices rose, pension benefits did the same. When stock prices declined, pensions held their gains. But the global recession has hit this system hard. With the market down nearly 50 percent from its 2007 highs, the police and fire pension fund has fallen to half the level it needs to be to continue paying benefits. Making up that shortfall under the existing pension plan would cost the city $62 million a year beyond an already heavy pension burden.

Pension proposal unfair to retirees In introducing legislation to the City Council that could reduce the hard-earned pension benefits of retired Baltimore police officers and firefighters, the city administration has shown its willingness to promote an idea that is rooted in greed and deception ("A costly pension benefit," editorial, Oct. 23). For almost 30 years under four different mayors, the variable benefit program has provided pension increases to retired police and fire employees.

John S. Chudzik, a retired labor attorney and advocate for medical and pension benefits for construction workers, died of acute kidney failure Thursday at the Presbyterian Home of Maryland. He was 93 and a Parkville resident. Born in Yonkers, N.Y., he joined the Civil Conservation Corps in the 1930s and worked in forest reclamation. He later enlisted in the Navy and worked in intelligence during World War II in Washington and Hawaii. After the war, he settled in Washington and earned a Bachelor of Arts, a law degree and a doctorate in law from George Washington University.

If you're like many 20-somethings, you're shouldering thousands of dollars in student loans, carry a balance on a credit card and try to make ends meet on an entry-level salary. So the notion of saving and investing - especially for retirement - may seem impossible or something to push off. But you may be in a better position than you know. Twenty-somethings have an asset that can be more valuable than cash: time. Money invested today - even small amounts - can grow into big sums over decades.

Nobody ever accused William Donald Schaefer of getting into public service for the money, but his five decades as a Baltimore city councilman, mayor, governor and comptroller have positioned him to receive more in pension benefits than he was earning on the job. All told, Schaefer, 85, is due to collect a taxpayer-funded pension of $165,000 a year from city and state government, records show. His pension is more than the governor's annual salary of $150,000, and it easily tops what two other Maryland political figures who have also exited the public stage - former U.S. Sen. Paul S. Sarbanes and Attorney General J. Joseph Curran Jr. - will receive this year after decades of government service.

ATLANTA -- Some retired Delta Air Lines pilots will get about $800 million in claims in the carrier's bankruptcy case to compensate them for lost pension benefits, airline and retiree representatives said yesterday. "It's remarkable," said Jim Gray, leader of DP3, a group representing more than 3,100 retired Delta pilots. "We were able to reach an agreement that avoids the costs and risks of litigation. The response among our people has been overwhelmingly positive." Delta said its unsecured creditors committee agreed to a retired pilot claim of $719 million, bringing the total to about $800 million, including previously negotiated amounts.

Public pension mess burdens taxpayers Many thanks for The Sun's welcome, if long-overdue, editorial "Rethinking public pensions" (Oct. 22). As it correctly points out, the world is moving away from pensions of all kinds. The private sector long ago recognized the financial burden traditional pensions place on the financial health of companies, and has moved rapidly from defined-benefit to defined-contribution plans for employees while, in many instances, reducing pension and health benefits to retirees.

WASHINGTON -- A little-noticed provision in a pension law signed yesterday by President Bush will for the first time allow anyone to inherit a 401(k) nest egg without immediately paying taxes on the windfall, a benefit that had been reserved for spouses. Gay advocates and other observers described the measure as a significant shift in the way the government treats domestic partners who are not married, even though the provision was not written specifically for same-sex couples. "With this change, Congress is acknowledging that improvements can be made to our laws that address financial inequities and impediments that same-sex couples face," said James M. Delaplane Jr., an attorney and specialist on pension benefits.

General Motors Corp. said yesterday that it would freeze or eliminate the traditional pension benefits of its U.S. salaried workers and move newer hires into a plan that relies more on 401(k) investments as the automaker continues to cut costs. The changes start next year and affect about 42,000 workers, including top executives. The automaker, which lost $8.6 billion last year, is shifting away from the guaranteed lifetime monthly pension payment plan it helped pioneer in the 1940s. "These decisions are difficult, but necessary to position GM for future success," Chief Executive Officer G. Richard Wagoner Jr.said.