Politics

Liberal Lawmakers Trying to Bail Out Private Pensions With Taxpayer Money

hospice-fraud-medicare money lawmakers liberalLast year, liberal lawmakers wanted to bail out the United Mine Workers of America’s pension plan to the tune of roughly $6 billion.

This year, they’re at it again, except on a larger scale. Under pressure from a few very large and politically powerful unions—including the United Mine Workers of America and the Central States Trucking Union—liberal lawmakers are seeking up to a hundredfold increase in taxpayer bailouts for private, union-run pension plans.

Across the U.S., there are more than 1,300 union-run or “multiemployer” pension plans. More than 90 percent of them have set aside less than 60 percent of what they promised to pay.

Private pension plans are a part of workers’ compensation. In the case of union-run or multiemployer pension plans, unions and employers together negotiate and manage pension plan contributions and investments.

Typically, workers receive lower paychecks in exchange for the promise of future pension benefits—i.e., a “secure retirement.”

Unfunded pension promises resulted, in large part, from reckless mismanagement. That mismanagement will leave workers more than $600 billion short of their promised benefits. Essentially, unions and employers have cheated their members and workers out of hundreds of billions of dollars in contracted compensation.

Instead of putting the unions and employers on the hook for their failure to make adequate pension contributions, many lawmakers seem willing to rob taxpayers to furnish those broken promises.

That would set a horrible precedent. Not only would it prop up failing industries that made reckless promises while penalizing those who have not—it would also cost taxpayers hundreds of billions, if not trillions, of dollars.

It is absolutely unfair and reprehensible that unions negotiated and promised benefits that they did not then provide for, but taxpayers never had a seat at those negotiating tables. They should not be held liable for those unmet promises.

If they are, there will be little to stop current and future union-run plans from continuing to promise unrealistic benefits and then failing to fund those promises.

Unfair as it is for workers to receive less than their promised pension benefits, it is not unprecedented. That’s one reason the government created the Pension Benefit Guaranty Corp.—to provide insurance so that workers don’t lose all of their promised pension benefits.

When a private pension plan becomes insolvent, the guaranty corporation pays out insured benefits—up to about $13,000 a year in the case of union-run pension plans.

But the corporation itself is on tap to become insolvent within eight years. If that happens, it would be able to pay less than 10 percent of insured benefits.

Politicians that support bailing out insolvent plans argue that doing so will actually save taxpayers money, because it will prevent the plans from requiring Pension Benefit Guaranty Corp. assistance.

But that’s impossible. For starters, the guaranty corporation is not taxpayer-funded, so taxpayers cannot be on the hook for its unfunded liabilities. And second, even if taxpayers were required to bail out the corporation, it cannot be more expensive to provide a portion of promised benefits (the corporation only insures benefits up to a maximum of about $13,000 per year) than it would be to provide 100 percent of plans’ promised benefits.

Instead of bailing out 100 percent of private union pension plans’ unfunded pension promises, lawmakers should focus on reforming the Pension Benefit Guaranty Corp. so that it can continue to provide pension insurance to workers and retirees whose pension plans have become insolvent—and to do so without a taxpayer bailout.

The magnitude of unfunded pension promises across the U.S. is enormous. There are over $600 billion in unfunded private union promises and more than $6 trillion in unfunded state and local government promises..

Lawmakers must not open the door to private and potentially public sector pension bailouts. Taxpayers who have their own retirements to save for cannot afford to pay for these broken promises.

From - The Daily Signal - by Rachel Greszler

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Hank
3 years ago

more ways the Federal Govt can spend money it doesn’t have. It’s good lip service though. It buys votes. It only has to work for a politician’s term, so they can collect a politicians pension.

Thomas Haj
3 years ago

Our country is like a giant bank account. When the vast majority of people take responsibility for their own actions, save money for their future and that of their descendants, and take care of the truly needy, the whole country prospers. When people have a “what can I get for free by having other people pay for it” attitude, the country eventually collapses. We are currently living in this latter case.

Sue
3 years ago

Pension fund people also pay taxes: federal, state and for those who live in municipalities pay those taxes also. It is not a free ride. Some places of employment are closed shop also: either pay fair share or union dues.

Angela
3 years ago

The union officials are corrupt. They donated kabillions to the dumicratic party. Let them pay and then go to jail. They could sell their mansions, benzes and the wives jewelry and fur coats. (Can you imagine those girls giving up their treasures? ha ha) No taxpayer should be burdened with the corruption of the union thieves or political thieves.

Donald Tucker
3 years ago

How in the world can anyone believe more socialism will bail out socialism? Only the leftist mind set can.

Richard Weise
3 years ago

I agree 110%. It’s time people, unions, corporations, states and other nations started paying their own way like me and most other folks! Get rid of the smoke and mirrors, cooking the books, corruption in our governments (city, county, state and Washington), etc. and America can, over the next 10 years, reduce our national debt from 20 or 21 trillion to just millions and have a balanced budget with a surplus. I know, I’m really pushing it, however… it’s possible and we can do it! End this Ponzi scheme!

RALPH GORDON ARANA
3 years ago

When a crisis arises such as this, you need not look back any further, than the financial collapse of 2005 through 2008. It would be a matter of time, before the housing bubble would implode and the economy would descend into a death spiral. If anyone deserved a ” BAILOUT ” it was the legitimate home owner. Careless management of taxpayers funds by the federal government to encourage reckless lending practices, led to out-of-control derivatives and an unconstitutional financial taxpayer ” bailout “. The same conniving scheme is being concocted by these politicians, who want the taxpayers to ” bailout ” the unions corrupt distribution of funds to their favorite lackey politicians in cesspool D.C. !!!. I say, ” HELL NO ” to the unions and hope that the rank and file goes to a ” call to arms ” and wipe out these corrupt union officials and their political lackeys .

James Ozbun
3 years ago

The Unions platform is based in and on Communistic/Socialistic thinking of redistribution of other people’s money and not their own.

Veteran
3 years ago

Unions should have invested their members’ money in America instead of giving it to Democrat campaigns and PACs, and buying golf courses so President Putt Putt the last could show his lousy technique. If they need money now they need to ask George Soros for donations not the American taxpayer.

BILL STOUT
3 years ago

Unions have been CORRUPT for many years, ran and robbed by Organized Crime over the years and most probably Liberals elected officials too. The taxpayers should not be required to bail out any Pension Fund due to mismanagement, thievery buy fund administrators or any other reason. It should be the Unions, which are no longer needed, to either make up the difference or the Union members to make them. Either way keep the Federal Government out of it as we have seen how government bailouts work with the auto industry, the “renewable energy industry” etc.

Hudahar
3 years ago

The Government need to bail out Social Security Trust Fund before bailing out any private funds. After all, it was Congress that stole the Social Security Pension Funds, much like the private employers and private unions have done to their employees/members.

James Nokes
3 years ago

The federal government took the money out of social security and continues to call it an entitlement program. Had the money paid into the program by the citizens and employers been placed in a “lock box” as it was supposed to have been and invested or even put in a regular interest earning savings account Americans wouldn’t have to worry about their retirement. Union workers and union organizations chose not to participate in social security so it should not be up to those that did to subsidize the failure of their pensions. It would not make sense for the pension holders to make up the difference in social security. For me it makes more sense for the pension holders to go after their organizational leaders and investors for the shortages. Taxpayers are not responsible for unions anymore than companies that were given bailouts. Union retirees can find jobs to subsidize their retirement just like most people on social security.

gerald baumann
3 years ago
Reply to  James Nokes

Every employer in America pays a set percentage of the wages into the social security fund. It does not matter if the employee is union or not; the employee has a ss account.

MichaelR
3 years ago

Tough situation. As the article stats the Government needs to focus on the Pension Benefit Guaranty Corp. My taxes should not be the avenue to “bail out” these pensions. I don’t have one and I am actively saving/investing for my retirement. I can not afford to pay for someone else’s as well.

Wayne D. Peterkin
3 years ago

The only thing that liberals are good at is buying votes with someone else’s money; our money. Since the entire Democratic Party is liberal and a few Republicans have gone over the the Dark Side, I despise them all. I will NEVER vote for a Democrat and want the RINOs replaced as well. The individual freedoms that make our nation unique and successful, that make millions around the world want to immigrate here, depend on the American people rejecting a massive and over-reaching federal government while accepting personal responsibility for our selves.

K. Haynes
3 years ago

The whole problem with all of this is there should be no public service unions !!!! You go to serve. You don’t go to get filthy rich off the backs of the working class. Period !!! Deadbeat unions steal every penny they can. All they do is protect the lazy and worthless in their cushy union job. To hell with these teachers unions !!! Look at are kids that are coming out of these commie loving universities !! There all dumb !! Yeah that’s a liberal, they have done there job. As far as these Walfare Bums inside the beltway, they have been living off of us there whole worthless lives !! Pelosi, Schumer, McConnell, Ryan. Etc. all stay there forever. That is not how it works !!! Serve a couple of terms and Get The Hell Out !!!!! That seat does not belong to you !!!!!!!! Term Limits Damn It !!!!!!!! I prey they all go straight to Hell !!!!!!!

gerald baumann
3 years ago

It is obvious to me that the author of this article has never sat in negotiations for a labor contract. It is not the employers responsibility to manage the pension funds; they are only responsible to pay the negotiated amount of money into the funds. The union officials, who are elected by their members, are responsible for managing the money. If the members elect poor fund managers then it is their loss. The taxpayers should not have to bail them out. Let them live on social security like millions of other Americans.

Burton Pauly
3 years ago

Well they best not try this approach to solving private pension bail out. If they do there’ll be hell to pay. That isn’t the responsibility of the tax payer.

David
3 years ago

In many ways it sounds like our Social Security program! Giant Ponzi schemes.

Martin
3 years ago

Before our Law Makers do anything about these private pensions they need to redo their own elite pensions that we are paying for.

Doloes Aams
3 years ago

The liberals in this government have no business using taxpayers money for anything.

PaulE
3 years ago

Agreed. The federal government should not become the financial back-stop for the over-promises and under-delivering of private pension plans. The federal government has made enough significant over-promises of its own to the American people over the decades, that it will NOT be able to meet existing promises to the American people over the long term. So it is both unfair and unreasonable to expect this additional burden should be heaped upon the shoulders of an already over-taxed American public. The workers in the article should go after the union heads and business owners in court for any financial redress on the matter. Unfortunately, a promise is NOT an obligation to pay once a company ceases to exist or the union depletes its own funds from which to pay members.

The PBGC already exists to provide some minimal level of pensions to private companies that have gone either bankrupt or completely gone out of business. Note the term minimal level, as in a safety net to provide some level other than ZERO. Which is what these pensioners would receive if the PBGC didn’t exist at all. PBGC was never designed to provide dollar-for dollar pension compensation for whatever unions or companies promised their workers. Typically, the PBGC pays out about 30 percent on average. Also PBGC, which is already being used as a catch-all by any company that goes bankrupt or fails completely, as a convenient dumping ground for the sometimes unrealistic pension obligations of millions of workers, is already in dire financial condition itself. The proposal by the liberal politicians would just accelerate and worsen an already financially strained PBGC. Sure liberals like to promise the government will be Santa Claus and bail everyone out, but we all know or at least should know by this point in our lives, that there is no such thing as a “free lunch”. They are simply trying to buy votes, which is what most of their promises are about. “Free, free, free. Everything will be free and it will all be paid for by somebody else. We promise.”

What the liberals are trying to do is make the federal government the financial back-stop for every pension over-promise made in the private sector. Thus making the federal government ultimately the provider of all, or at least most, private pension obligations. So people would ultimately be, if the liberals have their way, completely dependent on the government for any level of financial security in retirement. Can you say “creating another layer of dependency class”? Also, does anyone seriously believe the federal government won’t change the rules or re-direct those funds once they are the only show in town? Think what the federal government has already done with Social Security and Medicare. Do you like being taxed on your SS benefits? Do you like begging year after year for a small SS COLA increase, that almost all of which goes to cover Medicare increases? Do you like SS and Medicare surpluses being re-directed to fund new federal government programs (War on Poverty, Obamacare, etc.) with you having no say in the matter? This is the reality of what ceding control of your retirement future would look like. Of course the liberals will promise otherwise, but we should all know by now what their word is worth. Less than ZERO.

Kim
3 years ago
Reply to  PaulE

Great comments, PaulE.
Some people will never believe that there is bottom to that trough. What slop! The greed that the liberals are so quick to link to Conservatives has boomeranged, but then most of us have been aware of where it’s been all along.
Absolutely NO taxpayer-funded bail-outs of the unions’ mismanagement, ever! Now THERE’S another wall that needs to be built.

Robert J Curry
3 years ago
Reply to  PaulE

Public employees should be footing the expense of their retirement account themselves, NOT the TAX PAYERS! No one paid for my retirement but ME!

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