Saturday, February 04, 2006

The Mogul Behind One Failed Pension

I caught this story at Working Life and was dumbfounded.
Not a bad spread: 29 bedrooms, 39 bathrooms, a 164-seat theater, two bowling alleys, a restaurant-size kitchen, a 2.5 million-B.T.U. furnace, and a parking garage that could hold 200 cars. That's for one person: Ira Rennert.

But, Rennert may have to give up his palace in the Hamptons, as Mary Williams Walsh reports in today's New York Times. You see, while Rennert has been padding around his "home," the government's Pension Benefit Guaranty Corp has been saddled with a mess Rennert left when he dumped the pensions for 2,000 steelworkers who worked for his now-bankrupt WCI Steel. Too often, the PBGC has to shell out money--taxpayers money--to cover dumped pensions because there are not enough assets to recover in a bankrupt enterprise. But, luckily for the PBGC, the value of Rennert's "home" just about equals the pensions of the 2,000 workers--startling as that may be.

Let me get this straight: Rennert lives in a home with 29 bedrooms, but taxpayers are paying the bill for the dumped pension plan, and the workers who played by the rules all these years end up with much smaller pensions. I sure hope they take his home in the Hamptons, although Rennert will hardly feel the type of anxiety and financial insecurity his workers faced - he'll still own his Manhattan duplex on Park Avenue and a home in Israel.

2 comments:

abi said...

Let me get this straight: Rennert lives in a home with 29 bedrooms, but taxpayers are paying the bill for the dumped pension plan.

You got a problem with that? ;-)

It's the American way, unfortunately.

mikevotes said...

Yeah, as a long haul political proposition, it has been a political goal of some of the old money business people to undue the "progressive" steps taken from the turn of the century through FDR.

40 hour workweek, child and immigrant labor, work safety regulations, minimum wage, and more inportantly, those onerous government intrusions which hamper free business.

Things like antitrust, and price gouging protections.

The long term goal is to get back to the "freemarket" times of the robberbarons. And they have been somewhat successful.

Mike