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Sunday, June 12, 2005

Don McNay's Column, "Three Sure Bets to Save Employee's Pensions".

Enclosed is a copy of Don McNay’s column that will appear in the Richmond Register.

Media Appearances this week by Don: Don will appear on KET’s (Kentucky Educational Television) Comment on Kentucky program this Friday. Comment on Kentucky runs at 8.p.m on KET 1 and repeats at 12.30 p.m. on Sunday on KET 1 and at 10.30 p.m. on KET 2.

Don will also be a guest on the Dave Baker Show on WLAP-AM in Lexington (630 on the AM dial) on Tuesday. Don will appear on the show between 11. a.m. and Noon.

Three Sure Bets to Save Employee’s Pensions

“Gambling Man. Gambling Fool. I must be crazy to gamble on you.”

-Bonnie Raitt.

My late father and his friend “Sonny” (not his real name, none of Dad’s friends had real names) went to Las Vegas and “Sonny” was up $80,000 at the crap tables.

15 minutes before leaving, Dad called a cab while “Sonny” continued to shoot craps. When the cab came, “Sonny” got in quietly. On a flight from Las Vegas to St. Louis, “Sonny” did not make a sound.

While sitting in the St. Louis airport, “Sonny” finally spoke. “Joe, can I borrow $10, I’d like to get a sandwich.”

In those final 15 minutes, “Sonny” had lost all $80,000. He came back to Cincinnati penniless.

Many retired workers must feel like Sonny did. Their lives have changed quickly.

Coal miners, pilots and others whose companies promised health insurance and a good retirement plan are finding those companies lied.

The retirees weren’t gamblers like “Sonny.” People attracted to big companies avoid risk and want a steady paycheck. The companies did the gambling but they used the employees’ money to do it.

I grew up in Edgewood, close to the Greater Cincinnati airport. About half of my neighborhood worked for Delta Airlines. Delta paid good wages and had tremendous benefits.

The Delta people had their own culture. They could fly to exotic places for vacations, had plenty of days off and the employees loved working there.

When Leo Mullins took over as Delta’s CEO, Leo changed Delta’s focus from impressing their customers to impressing Wall Street.

The company’s culture changed as quickly as “Sonny” lost his $80,000. It is no longer fun to fly Delta. I can’t imagine it is fun to work there either.

Delta, United and many other companies promised their employees a good retirement. They were supposed to put enough money aside to keep those employees’ pensions safe.

Instead, the management spent the money on other things. The federal government did not crack down on companies ignoring the rules.

The company leaders want to dump the pensions on a obscure federal agency called the PBGC and let the taxpayers pay for what the companies promised.

Senator Jim Bunning is steaming mad about the stunt the companies are trying to pull. He asked the CEO of Delta a great question, “why should we reward lousy management?”

I’m wondering the same thing as Senator Bunning.

Those company officers destroyed wonderful corporations and played fast and loose with their employees’ pensions. They paid themselves multi-million dollar salaries while they drove their companies into the ground.

There are three simple ways to make sure retirees get their pensions.

One is to make sure that companies can’t dump their pension and health insurance plans by filing bankruptcy. It is ironic that Congress allows big companies to wiggle out of their pension plans while passing a terrible bankruptcy “reform” that sticks it to the average worker.

The second idea is to require companies to put aside money for pensions the same as companies put money put aside to pay payroll taxes.

A business that does not pay its payroll tax knows the IRS is going to come down on it hard and the penalties are steep. Businesses pay their payroll taxes before they pay anything else. Employee pensions need to be in that same category of importance.

The third idea would definitely work. Company officers should be personally liable if pension plans do not have enough money in them. If the pension plans run short, the officers would have to dig in their own pockets and make up the difference.

In my small company, I’m personally on the hook if the company cannot pay its bills. A large company should operate the same way.

If company officers have to pony up, they will make absolutely sure the employees get their pensions.

“Sonny” lost his money gambling but it was his money. Retirees are being forced to bet their futures on CEO’s who get big salaries even when they screw up.

You would have to be crazy to gamble on someone like that.

Don McNay is President of McNay Settlement Group where we don’t gamble with people’s pensions or anything else. He is a member of the National Society of Newspaper Columnists.

You can write to Don at or read other things he has written at

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Don McNay, Business Columnist with a Rock and Roll Attitude

Don McNay is a business columnist with a rock and roll attitude.

“I write with a spirit of rebellion tempered by life as a middle age financial advisor”, said McNay.

“I want my readers to be educated and outraged but also entertained,” said McNay.

McNay is one of the world’s most successful financial counselors for injury victims. For over 20 years, he has advised people who receive settlements, counseled lottery winners and helped people cope with a rapidly changing business world.

McNay has Master’s degrees from Vanderbilt University and the American College and a host of professional designations. He is a graduate of Eastern Kentucky University and was inducted into their Hall of Distinguished Alumni in 1998.

In addition to his column, that appears in the Richmond Register, Don has written for a number of legal and financial publications such as Trial Magazine, National Underwriter and Claims. He has given lectures and seminars all over the United States, Canada and Bermuda.

Don has been featured in publications such as Forbes Magazine, Registered Representative Magazine, Financial Planning Magazine, and Financial Industry Week.

He is a member of the National Society of Newspaper Columnists and the Society of Professional Journalists.
Don McNay
216 North Second Street
Richmond, Ky. 40475
(859) 626-3600
(859) 626-3633 (fax)