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Employees of bankrupt department-store chain Shopko Stores Inc. are demanding that the company’s private-equity sponsor provide severance to workers impacted by its liquidation, Bloomberg News reported. Shopko employees — organizing through the labor nonprofit United for Respect — released an open letter to Sun Capital Partners Inc. executives Marc Leder and Rodger Krouse on Friday to make their appeal. “Many of us have been left jobless and struggling to survive without severance for our years of service, and we are writing to you to demand accountability for Sun Capital’s actions,” read the letter, which asked that executives set up a fund for employees affected by the closures of the chain’s 350-plus stores. The move builds on the success of former Toys “R” Us workers, who successfully lobbied two of the chain’s private-equity owners, Bain Capital and KKR & Co., to create a $20 million hardship fund. Workers are increasingly speaking out to demand consideration during the bankruptcy process, buoyed by support from politicians, including some presidential hopefuls, in addition to the success of their peers.

The municipal-bond market has shown some optimism recently that Illinois and Chicago will ultimately tackle their huge pension burdens. But one of the biggest buyers of state and local government debt isn’t so sure, Bloomberg News reported. Franklin Templeton Investments, which manages more than $60 billion in municipal securities, said it won’t buy uninsured general-obligation bonds from Illinois and any debt from Chicago and the city’s public school system, citing the threat from “pension beasts.” “Will Illinois’ governor and Chicago’s mayor eventually impair bondholders rather than push for sensible pension reforms? We think it’s more likely than not, unfortunately,” Franklin analysts led by Sheila Amoroso wrote in a blog post. The comments buck the broader sentiment in the market, where Illinois bonds have rallied this year on optimism about Governor J.B. Pritzker’s plans to mend the state’s finances, in part by scrapping the flat income tax to raise more revenue. But state and local politicians’ focus on levying new taxes or selling assets such as land won’t make the math work to solve a pension problem that for Illinois is a “fire-breathing monster that dwarfs Illinois’ revenue-generating capacity,” the Franklin analysts wrote.

A group of retired Sears Holdings Corp. workers have asked for the creation of a committee to protect their interests as a retiree died shortly after his life insurance was canceled, Bloomberg News reported. Lawyers for the retired workers say that the bankrupt retailer has wrongly terminated the life insurance policies for tens of thousands of former employees. They believe the spouses of some Sears retirees who recently died have been deprived of the life insurance payment earned from years of work at the iconic department store, according to a court filing. In one instance, the life insurance policy of a Sears retiree who died May 6 won’t be paid because his death was 21 days after the Sears estate terminated his benefits, according to the Tuesday court filing. Sears filed for bankruptcy last year and sold its assets in January. The shell of the business that is now winding down with a plan to pay creditors said in an April court filing that it had stopped making premium payments and had terminated the retiree plan. The U.S. Department of Labor objected earlier this month to the estate plan to end the life insurance without court approval, but the estate responded that it has the right to “unilaterally amend or terminate the plan at any time.”

When Eddie Lampert committed to buy out Sears from bankruptcy, he agreed to pay displaced workers up to $43 million. Now, he’s changing his mind, Fortune reported. Lampert has asked a federal bankruptcy judge to release him from that promise, saying Sears has failed to live up to its obligation to sell him most of its assets. The $43 million was earmarked for employees who lost their jobs during the hundreds of store closings from the time of the bankruptcy filing through the time Lampert’s ESL Investments (via a new subsidiary called Transform Holdco) bought the company holdings. Lampert says Sears has not fallen short on several fronts, including handing over ownership of its headquarters in Chicago and delaying payments to key vendors. Sears Holdings, meanwhile, has sued Lampert, saying that he stripped $2 billion in assets, which could have been used to pay creditors, from the company as it veered toward bankruptcy. Last October, Sears filed bankruptcy after 125 years in business. Lampert has repeatedly said he hoped to save the company, though some critics say the store’s demise was hastened by some of his actions as CEO, such as selling off its best brands, including Craftsman and Lands’ End.

The House of Representatives passed legislation that would bring substantial changes to the U.S. retirement system, making it easier for employers to offer 401(k)-type plans and include annuities, which guarantee an annual income, as options for workers, the Wall Street Journal reported. Backed by a bipartisan group of lawmakers including Rep. Richard Neal (D- Mass.), chairman of the House Ways and Means Committee, the legislation would repeal the age cap for contributing to traditional individual retirement accounts, currently 70½. It would also increase the age to start taking required withdrawals from 401(k)s and IRAs to 72 from 70½. The House bill, known as the Setting Every Community Up for Retirement Enhancement, or Secure Act, passed with a vote of 417-3. A Senate GOP aide said that the plan is for the Senate to vote on the House’s Secure Act, rather than its own version, and Sen. Rob Portman (R-Ohio), a Finance Committee member who is active on retirement policy, said that the Senate should swiftly pass the House bill.