http://www.nytimes.com/2003/05/06/business/06PENS.html?ex=1053212759&ei=1&en=37fa45162b6e12c9
New York Times May 6, 2003 By MARY WILLIAMS WALSH
House Considers Measure to Cut Billions in Pension Obligations
A bill pending in the House of Representatives would allow businesses with union workers to reduce their company pension obligations by billions of dollars, because statistics show that most blue-collar workers do not live as long as other Americans.
The provision, which has gone largely unnoticed in a broad pension bill, is being supported by the United Auto Workers and manufacturing companies whose pension funds now have assets far short of what they are projected to need under previous assumptions about worker longevity.
The measure would allow companies to assume that their blue-collar workers will on average die sooner than pension plans now assume they will. So companies, not having to plan to pay future blue-collar pensions as long as they now do, would not be required to put aside as much pension money as government regulations now require them to do.
But the leader of a panel that developed the actuarial data on which the new provision is based said he had written to the Treasury Department, which regulates pension funds, to express concern that the data were being misapplied.
Edwin C. Hustead, chairman of the actuarial panel, said in an interview he was concerned that the data were being used in an improper way. White-collar workers are shown by statistics to live longer, he said, but the bill would not require companies to factor that into their pension calculations. If it were included, unionized companies with largely white-collar workers would have to set aside more to fulfill their promises to retirees in the future.
In addition, Mr. Hustead said workers' pay had been shown to be a more powerful predictor of life expectancy than whether a worker was blue collar or white collar, but the bill did not recognize that higher-paid workers live longer and therefore require longer pension payouts. Many auto workers and airline pilots are classified as blue collar in the bill, because they are covered by collective bargaining agreements, even though they are highly paid.
Full: http://www.nytimes.com/2003/05/06/business/06PENS.html?ex=1053212759&ei=1&en=37fa45162b6e12c9