Please Hit

There are MANY expenses associated with running this site, computers, wifi cards, travel to debates and conferences, purchase of research, etc.

Despite what the progressives say, I receive no funding from the Koch Brothers, Karl Rove, or the Worldwide Jewish Conspiracy.

The only way I offset my expenses is through the donations of my readers.

Folks PLEASE Consider Making a Donation to Keep This Site Going.

Hit the Tip Jar (it's on the left-hand column).

Monday, August 16, 2010

Hey Taxpayers, Get Ready To Pay For the Union Pension Failure Tsunami

Congress is coming after your wallets again, this time they will be bailing out multi-employer pension plans, retirement programs for union workers funded by employers and run by employer and union management..
 
Many multi-employer plans are struggling after years of financial hits especially after the last recession. Along with the value of the plans going down, as the boomer generation is reaching retirement age, every year the number of people tapping those retirement funds hits a new record.


A 2009 study from ratings firm Moody's Investors Service estimated that the country's largest multi-employer plans have long-term deficits of about $165 billion (108 plans). The report is summarized at the end of this post.

According the Wall Street Journal, things are even worse than the Moody's report indicates. The number of union-run pension plans may be in the hundreds.

Big Labor is desperate about the issue, should these pension plans collapse its curtains for the Union Leaders and it would not be the best recruiting tool for the labor movement in general. Adding to the crisis is a proposed new accounting rule that may expose that the pension "emeror" has no clothes. While Congress is on vacation, union lobbyists are feverishly pushing for the federal government to bail out the troubled multi-employer pension plans via S.3157 The Create Jobs and Save Benefits Act of 2010

The big problem with these plans is that when one company in the pool goes out of business, the other companies remain on the hook for the cost of the plan. These spiraling liabilities inspired Pennsylvania Senator and Big Labor favorite Bob Casey to introduce legislation to cordon off "orphaned" pensions—those for which an employer has stopped contributing or withdrawn from the plan—and drop them on the federal Pension Benefit Guaranty Corporation.
The federal agency, Pension Benefit Guaranty Corporation (PBGC), is already significantly underfunded and tax dollars are the "go to" place for more funding. The Casey bailout could dump as much as $165 billion in new liabilities on the PBGC.
This cause has taken on new political urgency, and no less than Senate Majority Whip Dick Durbin has endorsed the bill. The reason for the rush is new rules that may soon be issued by the Financial Accounting Standards Board (FASB), the green-eyeshade outfit that dictates how companies keep their books. Those proposed rules would expose the multi-employer time bomb.
Here's why. In 1980 an amendment to the Employee Retirement Income Security Act established the principle that any company in a multi-employer plan had a right to assume that other members would pay in perpetuity. Those that did not, and left the plan, were required to pay a "withdrawal penalty" to make the plan whole. This is fine in theory, though in reality these penalties have rarely covered the true cost of withdrawal, which means liabilities for remaining companies have continued to grow.


As plan obligations climb, and a mediocre stock market has reduced fund assets, more companies are running for the exits. Most notably, UPS was willing pay a remarkable $6.1 billion in 2007 to flee its plan. FASB's new rules are likely to acknowledge this new corporate reality, and they would in effect require companies to assume that they must pay the withdrawal penalty, and therefore to include that liability on either an income statement or balance sheet.
Ouch. Many companies have withdrawal liabilities that exceed their assets, and the result would be a painful reckoning. The accounting changes would also embarrass Big Labor, exposing its pension promises as bankrupt and perhaps leading to wholesale reform of multi-employer plans. One labor law firm, Groom Law Group, sent out an SOS in July, announcing its intention to form a group to fight the FASB rules, which it noted would put unions under "increased pressure at the bargaining table to decrease contributions and cut benefits." Anything but that.
Here comes the Casey bill to the rescue. Progressive Democrats could shift orphan company pensions to the taxpayer, the liabilities for the remaining companies would fall dramatically and make their balance sheets look pretty again. Of course the systemic problem is not fixed an there is no downward pressure on union benefits. All thanks to the 88% of the country who are not part of a union, whose pension plans are not protected because they are not part of the progressive's favored class, union members.   Unions and employers will be rewarded for their mis-management of pension plans, indeed Union leaders will be able to brag about their wonderful management and benefits as they recruit new union members. 

I supposed the union leaders will keep quiet about those members who are already retired, under Casey's bill, S. 3157  payouts to current retirees would be limited to $21,000 a year, much less than what they are expecting. 
If this all sounds like it could never pass, keep in mind this is the most willful Congress in modern history. Congress just completed paying off the teachers unions with $10 billion, and unions will put enormous pressure on Democrats to pass the pension bailout before they lose their huge majorities.


Many companies with multi-employer plans such as the trucking firm YRC Worldwide (organized by the Teamsters) are joining the union lobby effort, and more than a few Republicans could go along. The outrageous all too often becomes the inevitable with this Congress, and it will again unless taxpayers raise a ruckus.
 And all this will come out of YOUR pockets.This administration with the help of the Progressives that run congress has already spend much of your tax dollars to bail out union members, the $800 billion plus stimulus plan was one example, The President's executive order, known as the “High Road Contracting Policy”gives preferential treatment to government construction contractors who hire union workers (or pay money to the unions if they don't) is another.

The President who complains about special interests is hiding the fact that there is at least one special interest that owns the Democratic Party...The Unions.

Moody's Report Summary.


How bad off are the union pension plans? The best single indicator of a plan’s financial health is its Funding Percentage. A fully funded plan will have a funding percentage of 100%. A plan is underfunded when the percentage is below 100%. The lower the percentage, the greater the risk that benefits will not be available when they come due.

According to the Pension Protection Act of 2006 multi-employer (plans set through unions and company sponsors) plans are evaluated via their funding levels. To ensure retiree benefits are protected, when a multiemployer plan falls below certain funding levels, stronger funding requirements become effective under provisions of the Pension Protection Act of 2006. Plans whose funding levels are below 80% are referred to as “endangered,” while those below 65% are referred to as “critical.”

The list of 108 union pension plans below is from the Moody's September 2009 report. The ones in green print are at the endangered level, the ones in red are critical.







.



.
Union Pension Plan% Funded
.
Alaska Hotel & Restaurant Employees Pension Plan 79.70%
.
American Federation of Musicians & Employers Pension 78.90%
.
Teamsters Local 639 Employers Pension Trust 76.10%
.
Producer-Writers Guild of America Pension Plan 75.90%
.
Ohio Operating Engineers Pension Plan 75.70%
.
Laborers District Council and Contractors Pension Fund of Ohio 75.40%
.
Southern Nevada Culinary & Bartenders Pension Trust 75.40%
.
Alaska Electrical Pension Plan 74.30%
.
Alaska Laborers - Employers Retirement Fund 73.70%
.
Electrical Contractors Assoc. of City of Chicago Union 134, IBEW Jt. Pension 2 73.70%
.
Carpenters Retirement Plan of Western Washington 73.10%
.
Automotive Industries Pension Plan 72.40%
.
American Maritime Officers Pension Plan (2005) 72.40%
.
United Mine Workers of America 1974 Pension Plan 72.30%
.
GCIU Local 119B NY Printers League Pension Fund 71.40%
.
National Elevator Industry Pension 71.00%
.
Western Conference of Teamsters 70.60%
.
Newspaper GUILD of NY the New York Times Pension Plan 70.50%




.
Chicago District Council of Carpenters Pension Fund 70.10%
.
District No. 9, IAM and Aerospace Workers Pension 69.70%
.
Rocky Mt. UFCW Unions & Employers Pension Plan 69.50%
.
Hotel/Casino - Summary 69.50%
.
NECA-IBEW Pension Trust Fund 69.20%
.
Central Pension Fund of the IUOE and Participating Employers 69.20%
.
AFTRA Retirement Plan 68.90%
.
Carpenters Pension Trust Fund of St Louis 68.60%
.
MA State Carpenters Pension Fund 68.60%
.
National Automatic Sprinkler Industry Pension 67.80%
.
Midwest Operating Engineers Pension 67.80%
.
Retail Clerks Pension Plan 67.70%
.
Electrical Workers Pension Fund, Local 103, IBEW 67.50%
.
Building Trades United Pension Trust Fund MIL and Vicinity 67.40%
.
CWA/ITU Negotiated Pension Plan 66.80%
.
UFCW Unions & Employers Midwest Pension Fund 66.70%
.
Laborers Pension Fund 66.70%
.
Carpenters Pension Fund of Philadelphia and Vicinity 66.40%
.
UFCW International Union Pension Plan for Employees 66.40%
.
Alaska Teamster-Employer Pension Plan 66.30%




.
Steelworkers Pension Trust (2007) 66.20%
.
Hotel Industry-ILWU Pension Plan 65.70%
.
National Asbestos Workers Pension Fund 65.20%
.
IUOE Stationary Engineers Local 39 Pension Plan 65.20%
.
SEIU National Industry Pension Fund 65.00%
.
Trucking Employees of North Jersey Welfare Fund Inc. Pension Fund 65.00%
.
Massachusetts Laborers Pension Fund 64.70%
.
California Ironworkers Field Pension Trust 64.50%
.
Carpenters Pension Fund of Illinois 64.20%
.
Automotive Machinists Pension Plan 63.80%
.
NJ Carpenters Pension Fund 63.60%
.
The Newspaper Guild International Pension Plan 62.80%
.
Minnesota Laborers Pension Fund 62.40%
.
Bakery & Confectionery Union & Industry International Pension 62.30%
.
Laborers National Pension Fund 62.10%
.
Operating Engineers Pension Trust 61.70%
.
UFCW Unions and Food Employers Pension Plan of Central Ohio 61.30%
.
UFCW Nothern California Joint Pension 61.00%
.
Carpenters Pension fund of Western Pennsylvania 60.80%
.
Newspaper and Mail Delivers - Publishers Pension Fund 60.50%




.
Carpenter Pension Trust for Southern California 60.40%
.
BERT Bell Pete Rozelle NFL Player Retirement Plan 60.00%
.
Major League Baseball Players Pension Plan 59.60%
.
Sheet Metal Workers Pension Plan of S. CA, Arizona and Nevada 59.50%
.
NY District Council of Carpenters Pension Plan 59.30%
.
SO CA UFCW Union Joint Pension 58.40%
.
National Electrical Benefit Fund 58.20%
.
Boilermaker Blacksmith National Pension 58%
.
GCIU-Employer Retirement Fund 57.60%
.
ILWU-PMA Pension Plan 56.90%
.
Masters, Mates & Pilots Pension Plan 56.60%
.
Wisconsin Carpenters Pension Fund 56.50%
.
Electrical Workers Pension Trust Fund of Local Union 58 55.80%
.
Automotive Mechanics Local No. 701 Union Pension Fund 55.60%
.
IB of T Union Local 710 Pension 55.60%
.
Michigan Laborers Pension Fund 55.30%
.
PACE Industry Union-Management Pension Fund 55.20%
.
Pipe Fitters Retirement Fund Local 597 55.20%
.
Sheet Metal Workers Pension Plan of Northern Calif 55.10%
.
Central Pennsylvania Teamsters Defined Benefit Plan 55.10%




.
NY Hotel Trades Council and Hotel Association of NYC Pension Fund 55.10%
.
Teamsters Joint Council No. 83 of Verginia Pension Fund 54.90%
.
National Integrated Group Pension Plan 54.50%
.
Plumbers & Pipefitters National Pension 54.50%
.
Central Laborers Pension Fund 54.20%
.
Iron Workers District Council of Southern Ohio & Vicinity Pension Trust 53.90%
.
Carpenters Pension Trust Fund for Northern California 53.70%
.
Bricklayers & Trowel Trades International Pension Fund 53.60%
.
Western Pennsylvania Teamsters and Employers Pension Plan 53.10%
.
Chicago Newspaper Publishers Drivers Union Pension Trust 52.90%
.
OE Pension Trust Fund 52.40%
.
Indiana State District Council of Laborers & Hod Carriers Pension Fund 51.70%
.
NYS Teamsters Conference Pension & Retirement Fund 51.40%
.
LIUNA National Industrial Pension Fund 50.30%
.
Michigan Carpenters Pension Fund 50.20%
.
Twin City Carpenters Pension Fund 50.20%
.
Laborers Pension Trust Fund for Northern California 50.00%
.
HERE Local 25 and Hotel Association of Washington, DC Pension 49.30%
.
Central States SE&SW 48.50%
.
Teamsters Pension Trust of Philadelphia and Vicinity 48.50%




.
Operating Engineers Local 324 Pension Fund 47.30%
.
Laborers District Council of W. PA Pension Fund 46.80%
.
Iron Workers Local No. 25 Pension Trust Fund 46.40%
.
Local 705 IB of T Pension Trust Fund 46.30%
.
Building Service 32B-J Pension Fund 42.30%
.
Carpenters Pension Trust Fund Detroit & Vicinity 41.40%
.
New England Teamsters & Trucking Industry Pension 40.50%
.
FELRA and UFCW Pension Fund 39.80%
.
Local 804 I.B.T. and Local 447 IAM UPS Multi-employer Retirement Plan 39.70%
.
Sheet Metal Workers National Pension Fund 38.00%

4 comments:

Robert Williams said...

The Left, half by intention, half by accident, are creating the Cloward-Piven scenario. This is where they create such gargantuan demands on the public treasury that the system collapses and creates an historical moment where a new Socialist Tyranny can be forced upon a desperate people.

We must find a way to stop them and save the economy. Remember, the goal of the Cloward-Piven strategy is to ruin the economy.

M. Simon said...

Unions are becoming the enemy of the people. The people get it.

Unions are in very DEEP trouble.

GW said...

A superb post. This is nothing more than an attempt at outright theft, asking all Americans to pony up to protect corrupt unions simply because they form the base for Democrats. When one considers that private union employment stands at 7%, the scale of this theft becomes apparent. As I wrote in my post linking to this one, if this passes, our democracy is too dysfunctional to be saved, at least by the ballot box.

Debbie said...

This is theft, theft from those of us who have worked hard to save for ourselves, and now we must fund everybody else and every progressive program Obama comes up with. It just isn't fair. Seems everybody has a "right" to things except us having a "right" to what we have actually earned.

A acquaintance who has been out of work forever told me that she plans to "milk the system for all it's worth, stay on unemployment until every penny is gone that is available to her". She was offered three jobs, but turned them down for various reasons (she didn't want to drive 30 minutes to get to work; she wanted to get pregnant while on unemployment; she just didn't want to work).

I wanted to slap her. She doesn't seem to understand that it is OUR taxes being taken away from us that are paying her unemployment checks. She has not worked enough to pay in enough to cover what she has drawn.

Now these union payoffs. No wonder people are angry.

Debbie
Right Truth
http://www.righttruth.typepad.com