The Shame of Unions: Massively Underfunded Pensions
Over at Investor's Business Daily, Sean Higgins recently reported a curious and disturbing and mostly uncommented upon feature of the debate over "card check" legislation, a.k.a. The Employee Free Choice Act. Democratic leaders may be willing to jettison some elements of the legislation if they can still get mandatory arbitration in place as a way of getting management to help jack up funding of dangerously underfunded union pensions.
How weak are union-managed pension funds? The Labor Department today lists 96 in "critical status", meaning they have less than 65% of the assets needed to cover present and projected liabilities.
Another 127 are listed as "endangered," with 65% to 80% of the necessary assets.
That is based on data from last summer, before the market's September meltdown. The Labor Department's list is set to be updated later this summer.
Cynthia Eagan, spokeswoman for the Central New York Painters and Allied Trades Pension Plan, said they had only enough assets to cover 54% of their liabilities.
"That was based on last year's numbers. This year's numbers are even worse," Eagan told IBD. Asked when the fund may be able to get out of critical status, she replied: "We're not able to say right now."…
Among large defined-benefit programs—those with more than 100 participants—the institute found that only 19% of union plans are fully funded vs. 37% of non-union plans. Overall, 11% of large union defined benefits programs fell in the DOL's "critical" status and another 28% were "endangered."
In Higgins' account, the most controversial element of card-check—the gutting of secret ballots for union representation in the workplace—may become a sacrificial lamb that allows other provisions, inlcuding getting employers to pony up extra dough to pension plans, to get through the Senate.
Reason.com on labor here.
