With echoes of the Enron scandal, 120,000 United Airlines workers are facing a washout of their pension program that may return them 50-cents on the dollar. Iowa Senator Chuck Grassley is leading a hearing of the Senate Finance Committee today which he says has a goal of preventing the next pension collapse. Grassley says the hearing will cover how existing federal law “leaves room for chronic under-funding and how the law needs to be changed to protect workers and taxpayers.” Grassley says the hearing marks the first time the heads of leading air carriers with dire financial problems and seriously under-funded pensions will testify on Capitol Hill. Grassley says chief executives of major airlines will testify, including the head of United Airlines, which has a pension plan that is $9.8 BILLION under-funded. Grassley says United is a textbook case of what’s wrong with pension funding rules and it needs reform. Grassley says there are distinct parallels between what happened at United and the Enron collapse. “There’s one difference: what Enron did was illegal and what United did was legal,” Grassley says. He says he’s laying the groundwork for action on legislation this summer to dramatically improve the federal laws governing pensions, to prevent workers from having the rug yanked out from beneath them and to keep taxpayers from getting the bill in the potentially billions of dollars.
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