Windfall For Derelict Union Pension Fund Chiefs
Teamster Dons Who Lied to Workers About Pensions Get a Free Ride
Many provisions in the gargantuan COVID-19 “relief” package rubber-stamped by a Big Labor Congress and signed into law by President Joe Biden in March 2021 had nothing at all to do with COVID-19 or its economic impact.
Perhaps the most outrageous of all was an $86 billion down payment on a long-standing objective of top union bosses.
For years, transportation, grocery, and other union kingpins and their allied politicians had been trying to come up with a politically acceptable way to foist on taxpayers an estimated $600 billion or more in unfunded promises that Big Labor and its designees had made to employees.
Biden Scheme Sets Stage For Future Bailouts of Mismanaged Pension Funds
National Right to Work Committee Vice President Matthew Leen commented:
“Long before anyone had ever heard of COVID-19, union officials and businesses that colluded with them were grossly underfunding worker pension plans like the notorious Teamster Central States fund.
“Exploiting a pandemic as an excuse for a massive bailout that doesn’t require the culprits ever to pay back a dime to taxpayers or to incorporate real reforms to prevent similar future fiascos is one of the most cynical things Congress has ever done.
“And that says a lot!”
According to data reported by the Pension Benefit Guarantee Corporation (PBGC), a U.S. government agency, the total underfunding of Big Labor “multi-employer” pension plans (MEPPs) such as Central States had skyrocketed to $757 billion as of 2018.
More than 95% of the roughly 11 million workers and retirees in MEPP schemes are in plans that are less than 60% funded, as pension specialist Aharon Friedman pointed out in a November 2021 commentary for the Hill.
And the primary reason for rampant underfunding is that MEPPs have wielded their political influence with Big Labor-“friendly” politicians and bureaucrats in Washington, D.C., to get away with basing their pension promises to employees on wildly optimistic hypothetical investment returns.
“Pro-union monopoly federal labor policies and regulatory failures have spawned an MEPP debacle that will keep bilking taxpayers for more and more billions until the root causes are addressed,” said Mr. Leen.
“The $86 billion giveaway to MEPPs inserted in the Biden Administration’s so-called ‘American Rescue Plan’ [ARP] has set the stage for even bigger bailouts in the future.”
Most Money That’s Supposed To Keep MEPPs Going Until 2051 Is Already Allocated
Mr. Leen continued: “As of the middle of December, less than two years after the ARP’s enactment, $45.3 billion out of the $86 billion authorized for MEPP bailout schemes had already been allocated, including $35.8 billion for the Teamster Central States plan alone.
“The $45.3 billion reportedly will furnish assistance covering MEPP plans for 550,000 workers, retirees, and beneficiaries.
“That’s under 4% of the workers, retirees and beneficiaries who are in plans that are less than 60% funded.
“In other words, just over $40 billion is left for the other 96% of workers, retirees and beneficiaries.
“And under the ARP’s terms, that’s supposed to last until 2051.
“That doesn’t add up. Inevitably, within another year or two, Big Labor politicians will be demanding that taxpayers cough up tens or even hundreds of billions of dollars more to keep MEPPs afloat for a few more years.”
Legitimate Retiree Rescue Would Have Included Putting Failing Plans in Receivership
National Right to Work opposed to the hilt the ARP generally and its MEPP bailout provisions specifically, but it would not have opposed a legitimate rescue package for MEPP workers and retirees and their beneficiaries.
Mr. Leen explained: “Since MEPP-covered workers, many of whom aren’t even voluntary union members, aren’t responsible for the misdeeds of Big Labor pension managers or their partners, a federal bailout of MEPPs may have been unavoidable.
“But a legitimate rescue would have incorporated real reforms, like putting failing plans in receivership and abolishing or at least curtailing union bosses’ monopoly-bargaining privileges.
“Instead, thanks to President Biden and his allies, taxpayers are getting the worst of both worlds: an extraordinarily costly bailout, combined with zero reform of how MEPPs operate.”
This article was originally published in the Committee’s monthly newsletter. Go here to access previous newsletter posts.