Social Security

Bailout for Union Pensions?

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Is "card check" still dead? Maybe, but according to the DC Examiner, a compromise bill making the rounds could force, via binding arbitration, "private firms…to save underfunded union pension plans even if doing so reduces profits and jeopardizes the retirement savings of non-union workers."

[M]any [union pension plans] are severely underfunded and staggering under steadily increasing rising liabilities. Pensions for nearly half of the nation's 20 largest unions are classified as either "endangered" or in "critical" condition due to underfunding, according to federal actuarial reports. Pensions with less than 80 percent of the assets needed to cover present and projected liabilities are considered "endangered," while those below 65 percent are classified as "critical" under the Pension Protection Act of 2006. The average union pension has resources to cover only 62 percent of what is owed to participants, according to the government-backed Pension Benefit Guarantee Corp. (PBGC). Less than one in 160 workers is presently covered by a properly funded union pension plan. Failed pension plans are bailed out by the PBGC. […]

a Card Check compromise that includes mandatory arbitration would give unions that inadequately funded their pension plans a backdoor way to get a bailout, paid for either by the company or the tax payers.

Reason on card check here. Jon Entine's February cover story on the looming pension "catastrophe" here.