We're proposing something called “super-priority” for pensions. Frankly, I think it's egregious that our corporations would, as Sears has done, sell off assets, make a dividend of $500 million to primarily a U.S. parent, and leave the pension plan underfunded by $300 million. What's even worse is that our laws allow this to happen.
What CARP is saying is that in the event of a bankruptcy or insolvency, pensioners should be at the front of the line for any unfunded liability in a pension plan. I understand that others have security, but when we look at the reality, banks have other customers. A small business creditor may be owed for 30, 60, 90, or 180 days of work. Pensioners don't typically have other pensions, and they can be owed decades' worth of deferred compensation. I therefore think the most critical ones to be covered in the event of a bankruptcy or insolvency are pensioners. That's why we are strongly recommending pensioners be put at the front of the line for unfunded liabilities.