Troubled labor looks to federal government for help on pensions

Don · Apr 7, 2010

Just another brick in the wall.

Legislation introduced last week could shift costs of union pension plans to taxpayers in an attempt to stave off organized labor’s pension funding crisis.

Senator Bob Casey, Pennsylvania Democrat, introduced the Create Jobs & Save Benefits Act of 2010 to address the funding problems faced by union-administered multi-employer pension plans.

Multi-employer pension plans have to cover the benefits of members, even if their companies are defunct. Currently the costs are shared among the companies that remain in the pool, but Casey’s bill proposes offloading them to thePension Benefit Guarantee Corporation (PBGC), a federal corporation, which backs the pensions of 44 million workers, more than 75 percent of which are nonunion.

Estimated cost: 8 to 10 billion dollars.

On the other hand, the pension plans of the union leaders, separate from those of the members, are doing just fine.

The average union staff plan is funded at over 95 percent, while the average funding percentage of a rank-and-file member’s pension plan is 79 percent, according to the Hudson Institute. None of the staff pensions are on the Department of Labor’s list of critically underfunded pension plans, while more than half of rank-and-file pension plans are endangered. (A pension is considered “endangered” by the government when it contains less than 80 percent of the assets needed to cover its liabilities.)

...

The higher pension contributions to the staff plans come straight from the dues paid by union members, according to the Hudson Institute. In fact, the main reason union leaders are so eager for new recruits, the study found, was to bankroll the failing collectively bargained pension plans.

“You’re not supposed to pay yourself first, but they do, and they pay themselves quite well, and then they appear to bargain for their membership,” said McMahon. “If they were really dedicated to what they were doing, which I think at [one] point they were, decades ago, it wouldn’t look like this.”

MattW · Apr 7, 2010

Unions are good for America. They keep kids from working in fiery deathtraps, they will collaborates with companies to keep Americans employed, and produce nothing but quality goods at fair prices.

Maybe if unions were taken back from union leadership, there might be a use for them in revitalizing the American workforce, but i don't see it.

icerose · Apr 7, 2010

The unions for the mines here can be horrid. If you don't join (which is "voluntary") they will burn your clothes and boots, slash your tires, and basically make the mines unworkable. When you do join they order strikes without votes and barter for 10 cent raise while leaking away 20% of your benefits. Yeah they're effective.

Gregg · Apr 7, 2010

For the first time, a majority of union members work for government. It's not surprising that, with private sector union membership declining, the unions can't support their own pensions.

Kind of reminds me of the social security situation.

Troubled labor looks to federal government for help on pensions

Don

All Living is Local

MattW

Company Man

icerose

Lost in School Work

Gregg

Life is good