"Bethlehem Steel was a giant. You knew if you worked for a place like that, you were ... set for life."
-- Wife of a Bethlehem Steel employee

"The human tragedy [of Bethlehem Steel] is not so much the loss of jobs. ... The human tragedy is the many, many people who were dependent on benefits which they thought were guaranteed."
-- Lance Metz, historian, National Canal Museum

PBS reran its superb documentary on the history of Bethlehem Steel a few weeks ago. As I was watching, the above comments jumped out at me. The contrast between what workers and retirees believe their future will hold and the awful way it often plays out couldn't be starker. Because when Bethlehem Steel went bankrupt, not only did the company die, not only did workers lose their jobs -- but also retirees who had thought themselves "set for life" found themselves left out in the cold instead.

A cautionary tale
Bethlehem Steel spanned nearly a century and a half of American history. The company quite literally built the iron bones of our nation. But by the 1990s, the company's own bones had become frail. Wracked by debt and diminished in power by foreign competition, Bethlehem struggled to earn the profits necessary to pay the salaries of its 11,500 workers and the pensions of its 120,000 retirees and their dependents. In 2001, Bethlehem filed for bankruptcy. One year later, it transferred its pension fund and its obligations to the U.S. Pension Benefit Guaranty Corporation (PBGC).

In one fell swoop, those retirees -- people who had already fulfilled their side of the social contract -- were put at the mercy of the federal bureaucracy. This would have been fine, except that mercy isn't a strong suit of bureaucracy.

In no time at all, the PBGC put the kibosh on Bethlehem's agreement to let workers retire and collect their pensions after 30 years of employment. When the PBGC took over the duty to pay those pensions, the 30-years-and-out agreement was scrapped, and workers got the standard U.S. worker's deal: Work until age 62 or forget about collecting a check. It didn't matter whether you had 29 of your 30 years left or were about to hit 30 next week -- if you hadn't crossed the finish line yet, PBGC erased it right in front of your eyes.

But it gets worse. For Bethlehem's current retirees, and for those workers who soldiered on in the employ of International Steel Group (which ultimately bought Bethlehem), the secure retirement they had worked their whole lives to obtain was about to become less secure. Because when a pension fund is underfunded, the PBGC doesn't necessarily make up the whole difference. In Bethlehem's case, the PBGC determined that the pension fund lacked $4.3 billion to be made sound. The PBGC anted up $3.7 billion. But that's the good news. The bad news was that Bethlehem's employees and retirees had also bargained -- and worked -- for the promise of health-care coverage in retirement. The PBGC calculated the value of that promise at $3.1 billion -- but the PBGC didn't cover a dime of it.

"It could happen to you"
Heed the prophetic words of Ed McMahon. A recent study conducted by Camelback Research listed the top 20 U.S. companies whose pension obligations are massively underfunded in comparison with the companies' size. At the top of the list -- as will surprise no one who reads a newspaper from time to time -- are the nation's airlines. Delta (NYSE:DAL), Northwest (NASDAQ:NWAC), American (NYSE:AMR), and Continental (NYSE:CAL) claim the top four spots on the list, with unfunded pension liabilities totaling a staggering $13 billion.

Further down the list, we see representatives from the other smokestack industries: automobiles (Ford (NYSE:F)), steel (AK Steel (NYSE:AKS)), and chemicals (W.R. Grace (NYSE:GRA)).

What all these companies have in common, of course, is that they date from the era of the old social contract: You give your employer the best years of your life, and in return for your loyalty, and for taking a lower wage than you could have earned elsewhere, your employer will provide you a decent pension in your golden years.

As the wife of one Bethlehem Steel employee put it: "We devoted our entire lives to this moment" when she and her husband could retire.

And there's the rub. Just when the workers thought they were about to retire, Bethlehem reneged on its end of the deal. Workers who were just a few years, months, or even weeks away from their 30th anniversary found that the PBGC had shifted the goalposts.

Only you can rule your retirement
Now every story needs a moral, and this one is no exception: The age of the old social contract is kaput.

Whether by design or incompetence, the managements of many of the greatest companies of America's yesteryears are today unable to keep their word. As Steve Miller, the man brought in to "save" Bethlehem Steel in 2001, put it: "We do not have the money to make good on all the promises made by this corporation over the last 50 years."

So if you're nearing retirement, or if you're already retired and depend on your former employer to continue paying your benefits, it's only prudent to ask yourself how much faith you have in your employer to honor its pension promises. And how certain are you that the company actually has the money to honor those promises? If the answer to either of those questions is anything less than "absolute faith," it's time to start thinking about what you're going to do about that. If your company won't take care of you, and if your government won't pick up the slack, then there's only one person left who can make your retirement secure for yourself and your family: You.

It's a sobering responsibility, to be sure. But you're not alone in this. At Motley Fool Rule Your Retirement, we're here to help. Through providing advice on investment, asset allocation, insurance, and a host of other crucial retirement issues, we aim to empower our members to control their own destinies -- to truly "rule their retirement." We invite you to take a preview of our service with a fully guaranteed 30-day free trial of our newsletter. It costs nothing to start, and if you like the service, we hope you'll remain with us as a charter member. If not, cancel, and we'll gladly refund you for the entire unused portion of your subscription. No questions asked. No strings attached.

Fool contributor Rich Smith does not own shares in any of the companies named above. The Motley Fool's disclosure policy is fully funded.