When you run a pension plan, there's always the danger of under-funding. Maybe you didn't collect enough from each member; maybe your investments were lousy. Maybe both. And losing membership is definitely bad for the funding.
When you're under-funded, new membership is a very attractive remedy. LOTS of new membership is extremely attractive.
Almost half of the nation’s 20 largest unions have pension funds that federal law classifies as “endangered” or in “critical” condition due to being underfunded, an Examiner review of federal actuarial reports shows.
Pensions with less than 80 percent of the assets needed to cover present and projected liabilities are considered “endangered,” while those that fall below a 65 percent threshold are classified as “critical” under the Pension Protection Act of 2006
That's one reason "Card-Check" is vital to the unions--it gets them membership. It's also the reason that Doyle inserted the SEIU membership requirement for certain health-care workers into his budget. SEIU wants, Doyle gives! And it's clear why the UFCW has been desperate to organize WallyWorld, too.
Eight of the largest unions have underfunded plans, according to the most recent 5500 reports, including the Service Employees International Union (SEIU), the United Food and Commercial Workers (UFCW), the International Brotherhood of Electrical Workers, the Laborers International Union of Northern America, the International Association of Machinists, the United Brotherhood of Carpenters, the International Union of Operating Engineers, and the National Plumbers Union.
The average union pension has resources to cover only 62 percent of what is owed to participants, according to the Pension Benefit Guarantee Corporation (PBGC). Less than one in every 160 workers is covered by a union pension with required assets.
Note: these are 2007 numbers--they don't reflect the Dow-Dive of '08.
You might not want to be the union pension-payer when all those guys figure out they've been screwed...
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2 comments:
If you are going to try to paint a picture of pension health, why don't you include some private employers pensions. While most private employers do not offer pensions any longer, an average of those that are left would be well below 62%.
PPA of 2006 required pension funds that had more than 105% funding in their pensions to get below 105%. Funds sitting comfortably at 130% were forced to drop 25%, and that is a large part of the funding shortage that so many pensions are currently experiencing. Why did this act require to do this- because Bush felt it was inappropriate for unions to have too much money in their funds. So the result is that the retiree's future is put in question. How does that make good sense for the people of our country?
Off topic, Ed.
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