Problems For Polaroid Retirees Worsen

JULY 2002
- Pension Benefits May Be Reduced - Unfortunately the problems for Polaroid's retirees continue to go
from bad to worse, further demonstrating the importance of the pension
and insurance protections for public retirees that we have under Mass.
law. These same retirees, who have been devastated by the loss of their
health insurance benefits, may also suffer a reduction in their Polaroid pensions.

It
turns out that Polaroid's pension plan is underfunded, meaning its
liabilities exceed its assets. Not surprisingly, potential buyers of
Polaroid are reluctant to assume these liabilities, as well as retiree
health benefits.

If the company is
sold without the pension plan, then it will be terminated and taken
over by a federal agency known as the Pension Benefit Guaranty
Corporation. With the plan's termination, its liabilities will also
grow to over a billion dollars.

This
scenario would not bode well for Polaroid's retirees. They could
receive less pension benefits than what they are now receiving under
the plan.

Secretary Galvin Investigates

"The
Polaroid experience, like those at other companies that have collapsed
recently, demonstrates the complete inadequacy of our laws relating to
protection of pensions and retirees in the private sector," states
Secretary of State William Galvin. Currently, Galvin's office is
investigating whether Polaroid employees were coerced into purchasing
now-worthless company stock. "There is an obligation on the part of
private employers to provide some pension for their employees."

"Fortunately,
there is a substantial body of law which protects the pension and
insurance benefits of our public retirees and prevents the intolerable
situation being faced by Polaroid retirees," comments Association
Legislative Chairman Bill Hill. "And we will continue to further
improve that law."

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