More Union Pension Plan Bailouts Proposed

These stupid ideas won't die! Yet another proposed bailout of a mis-managed Union pension plan has been proposed, the Miners' Pension Protection Act. According to the Heritage Foundation, union managed private sector pension plans are in a cumulative hole of $638 Billion, meaning workers were promised nearly $640 Billion more in benefits than the union funds have in projected assets. Much of the short-fall is in multi-empoyer funds.

The huge labor unions and large employers are almost solely to blame for this predicament. In the past 10 years, stocks have enjoyed an extended bull market which has boosted pension returns so that the average corporate fund was 87% funded at the end of 2018. Not so most union controlled multi-employer funds.

The Pension Benefit Guarantee Corp (PBGC) is a Federal Government administered insurance fund that's supposed to guarantee pensions. There are separate funds for single employer and multi-employer pensions. The single employer fund is in good shape financially but the multi-employer fund is in horrible shape because large corporations, who fund pension insurance, were not make actuarily sound payments into the fund.

The solution is fairly simple:
1) Require huge corporations that have multi-employer pensions to make larger insurance premium payments into the multi-employer PBGC fund.
2) Require labor unions to calculate reasonable rates of return when assessing the funding level of their pensions and require companies to make adequate contirbutions to their pension plans.
3) Cut benefits to pensioners rather than tax hard-working taxpayers in order to make up the difference in promised pensions.

It is hugely important that taxpayers resist bailing out private pensions as a Federally managed bailout of private, union plans may lead to bailouts of public sector funds.

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More Union Pension Plan Bailouts Proposed