If you want to know the details of how, read the book. The companies learned how and did take money out of pensions through spin offs, mergers that allowed conversions of pension plans. I lost about 40% of my pension. I worked five years under a converted plan and earned no additional pension because the of the conversion method. These cases are still going thru the courts form 10+ years ago.
The 2006 Pension Protection Act corrected some of the stuff with conversions, but Congress would not address what happened prior saying that is up to the courts.
The PBGC does guarantee private pensions. The companies pay insurance for this and if the PBGC does not have enough money, yes the TAX payers kick in. But most earned pensions are larger than the PBGC guarantee so pensions are cut. This happened to the Airline employees and Steel workers at LTV / Republic Steel and others.
Today if you retire and can get a lump sum, it will be limited by the PBGC if the Plan is underfunded. So you will get a partial lump and a monthly benefit. Once the plan is properly funded you maybe able to get the remaining in a lump.
The executives used legal tricks to protect their executive plans, just like they dipped into pension plan funds for severance benefits and other non pension expenses.
Bottom line, pensions are a just promises that did not get kept always. The same is happening for the public plans.
Below is the maximum pension info from the PBGC.
PBGC Maximum Monthly Guarantees for 2012*
Age 2012 Straight-Life Annuity 2012 Joint and 50% Survivor Annuity**
65 $4,653.41 $4,188.07
64 $4,327.67 $3,894.90
63 $4,001.93 $3,601.74
62 $3,676.19 $3,308.57
61 $3,350.46 $3,015.41
60 $3,024.72 $2,722.25
59 $2,838.58 $2,554.72
58 $2,652.44 $2,387.20
57 $2,466.31 $2,219.68
56 $2,280.17 $2,052.15
55 $2,094.03 $1,884.63