At Work

Teamsters pension crisis shows how unions add risks to workers

Democratic politicians are great at bashing corporate America, from CEO pay to the use of tax loopholes. When it comes to unions there is dead silence. However, in many cases it is unions, not employers who are the greater threat to workers.

Here is a good example involving multi-employer union pension funds. These plans cover over four million workers. For a variety of reasons these plans are mismanaged. Many are severely underfunded and some may be required to cut benefits for current retirees. 

When it comes to reducing future COLAs in Social Security it’s called a cut in benefits, but when union pension plans have insufficient funds to actually pay earned benefits, Democrats keep accepting Union campaign contributions which come from the dues paying Union members whose pensions are at risk. Can you say hypocrisy?

Although these plans were created with the best of intentions, they generally have lower levels of funding than do plans sponsored by private employers. Congress considers funds with less than 80% of needed assets to be in “endangered” status, and those with less than 65% to be in “critical” status.

The Labor Department lists critical and endangered plans on its Web site, which shows 174 union plans in “critical condition” and 50 in “critical and declining condition” (including the Central States Southeast and Southwest Areas Pension Fund) for 2015.

Source: Teamsters pension crisis shows how unions add risks to workers – MarketWatch

P.S. Some observers believe the Obama Administration is intentionally pushing these plans to their limit with the ultimate goal of a federal taxpayer bailout.

UPDATE And its not just union plans, its government plans for public employee unions. http://www.bloomberg.com/news/articles/2016-05-19/chicago-s-pension-fund-troubles-just-became-11-5-billion-bigger

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2 replies »

  1. The collusion here is among employers, the unions and the employees themselves. It IS criminal. ERISA was approved 42 years ago with minimum funding, etc. So, there is no excuse. Not only am I not interested in a taxpayer bailout, I am looking for the Justice Department to start prosecutions – for deliberately underfunding these plans. In other words, if I, as a single employer plan sponsor tried this crap, I would be going to jail.

    Give em a choice, cut the benefits to the levels the funding justifies, or go to jail. Let’s see how union members vote with respect to their union leaders who were plan trustees.

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  2. Of course there will be a taxpayer bailout at some point in the near future. But until then, if Congress really cared about these pensions they would require the unions to stop political donations and put the money into the retirement funds. But with the corruption in government and union leadership do you think they would ever do the right thing? Maybe when Hell freezes over.

    Liked by 1 person

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