Let’s say you are a member of a good union and the union has negotiated a nice benefits package including health benefits when workers retire.
Those benefits were negotiated over several contracts during which there were tradeoffs in wage increases, cost sharing of active employee benefits, etc. In other words, active workers paid for their future retirement benefits; they are deferred compensation.
The union and the employer made an agreement in good faith; they made a commitment, a commitment workers believed they could count on perhaps planned their future retirement on.
Not so fast‼️
Once a worker retires all past agreements are irrelevant, they have no protection. Today, they are a member of a union, tomorrow when they retire they are not a union member, the union cannot negotiate for them and cannot protect them. The employer can change or terminate the benefits that were negotiated for them and which they and all active employees paid for.
Employers can pick and choose the changes they want to make. Let’s say you retired with health benefits and the employer agreed during collective bargaining to pay 70% of the premium cost. Now it decides instead it will give workers a fixed lump sum and all future premium increases are on the retiree…or the employer can simply ignore all past agreements and terminate all benefits.
This is the ultimate Catch-22. Workers can’t win. They pay for something one day only to have it taken away the next. ERISA protects pensions; earned pensions cannot simply be taken away, but there are no protections for other benefits.
Even if unions could bargain for retirees, why should they? Retirees are not members, they can’t vote in union elections and they don’t pay dues.