Multi-employer union pension plans need a bailout fast. Too many such plans are insolvent and nothing less than the future of private-sector unions and the Democratic Party is at stake. Democrats plan on asking taxpayers for a $165 billion bailout of these private pension plans during the lame duck session.
Here’s the story.
Covering unionized companies in industries like trucking, construction, grocery, etc., multiemployer plans were negotiated to provide security for union workers’ pensions. In the typical plan, a number of, say, unionized trucking companies pool their employee pension plans into one plan. The combined plan provides that if one company fails, the others will pick up the pension obligations of that company’s employees.
The problem today is that too many of the approximate 1,500 such pension plans face insolvency because too many of the companies in them have actually gone bankrupt or otherwise out of business, leaving too few viable companies in the plan to shoulder the burden of the multi-company retired work force.
In an article in the Washington Examiner, Mark Hemingway reports that a Government Accountability Office study found that the number of workers paying into these multiemployer plans last matched the number of retirees receiving a pension in 1998. Since then, the number of workers has declined and the number of retirees ballooned.
Today, for example, the Teamster Union plan covering trucking companies has some four times the number of retirees as workers paying in. The unfunded liability is enormous and growing. These ponzi schemes are in terminal condition.
The Kroger grocery chain reported last year that its multiemployer pension liabilities more than doubled in one year to $1.2 billion.
Now, bankers and Wall Street analysts are demanding a full disclosure of the real liabilities of these plans for hundreds of companies. The Federal Accounting Standards Board (FASB) has proposed a new rule requiring companies in multiemployer plans to make a full public disclosure.
Since such a full disclosure could effectively wipe out the net worth of many companies and the collapsing house of cards could wipe out these companies, along with the pension plans, the union jobs, and the union campaign cash that is the lifeblood of the Democratic Party.
President Obama promised that “transparency and the rule of law will be the touchstone of this presidency.” Democrats are desperate to keep hidden from public view (at least until after the election) the catastrophe they face if this problem doesn’t get a taxpayer funded bailout.
Enter Sen. Bob Casey (D.-Pa.) who quietly introduced a bill last March to provide a $165 billion taxpayer bailout for these multiemployer pension plans. The bill went nowhere as public opinion hardened against federal bailouts.
The only other solution to this problem was “card check,” to make it easier to organize nonunion firms and bludgeon them into these multiemployer plans thus providing fresh infusions of cash to cover the liabilities. “Card check” went nowhere either when the public discovered it meant that workers would lose the right to a secret ballot in elections regarding union representation.
So count on this—Casey’s bill is vital to the future of organized labor and the Democrat Party it funds. Casey’s bill will be back in the lame duck congressional session, if Republicans regain control of the House. If Democrats retain control of Congress, the bill will top the priority list for Democrats after January when the FASB rule will go into effect.
This sounds like an opportunity too good to pass up to stop another bailout and free the Democrat Party from the puppet master of Big Labor.