With just eight years to go, Steve Derebey had been eyeing his mandatory retirement age with something close to relief.
A commercial airline pilot, the 52-year-old would not be worrying "about guys behind [him] with box cutters," he said. Just as important, his $66,000-a-year pension would leave him and his wife, Jeane, free to travel from their home in Gig Harbor, Wash., to visit the grandchild in Crystal Lake, Ill., who is due in January.
But last month, in a Chicago bankruptcy court, United Airlines almost certainly changed the rest of the Derebeys' life, warning that it will likely dump its pension plan onto the federal government. Under the rules of the federal Pension Benefit Guaranty Corp. (PBGC), Derebey would be left with $22,000 a year, a third of his expected benefit. Now, he and his wife are hastily planning a second career, a long one, they say, maybe running their own public relations shop in Seattle.
"Instead of being able to retire, see our kids, we're probably going to have to work until we die," Jeane Derebey said.
The Derebeys' misfortunes are part of a phenomenon that is reshaping the financial landscape for America's retirees. As the baby boom generation retires and people live longer, both Social Security and privately funded pensions -- the two basic legs of American retirement income -- are under increasing financial pressure.
Yet beyond a vague debate over the future of Social Security, neither President Bush nor Sen. John F. Kerry (D-Mass.) has made much mention of looming pension and savings problems, despite pleas for federal intervention from unions, employers and even the PBGC itself.
"Go onto the Bush and Kerry Web sites, looking for the word 'pension,' " said James A. Klein, president of the employer-backed American Benefits Council. "You don't see a heck of a lot."
It is an issue, however, that could land in the lap of taxpayers -- and the next president. The collapse of the stock market bubble cut the value of many pension fund investments, and left company-funded programs scrambling to meet the demands of an aging workforce. The PBGC, the federally backed insurer of pension funds, is having to raise its premiums to cover the cost of defaulted programs, putting the plans that remain under even more financial stress.
"There is a possibility of a looming train wreck that could cost the taxpayers of America untold billions of dollars," Senate Commerce Committee Chairman John McCain (R-Ariz.) warned last week.
The pessimism is widespread among labor unions and business executives alike.