WASHINGTON, D.C. | August 3, 2009 -
Will they or won’t they?
That was the question on Capitol Hill last week as Democrats wrestled with their self-imposed deadline to rush a radical overhaul of our nation’s health care system through both chambers before the month-long August recess started.
In the end, that question remained unanswered, with Democrats in both the House and Senate facing stiff opposition to their plan to put bureaucrats in charge of health care decisions best left to patients and doctors.
Unfortunately, all the talk about employer-provided health care benefits may have overshadowed another issue important to working families: their pension benefits.
Pension benefits may not be as headline-grabbing as health care. But Democrats' proposed "remedy" could be just as devastating to the economy. The Wall Street Journal gives the details here:
“We’ve all read about underfunded corporate pensions, but here’s an unreported story: Union pensions are even more in the red, and it’s one reason union chiefs are so eager to rig organizing rules to gain more dues-paying members. …
“In April, the SEIU National Industry Pension Fund—which covers some 101,000 rank-and-file members—announced that its pension has been put into what the feds call ‘critical status,’ or ‘red zone.’ In other words, it lacks the cash to pay promised benefits and may have to cut them. As of 2007, the last year for which it reported results to the government, the fund had 74.4% of the assets needed to pay its benefits.
“Thirteen of the bigger plans operated for the Teamsters have, together, a mere 59.3% of reserves necessary to cover obligations. Or consider that 26 pension funds at the food workers union, the UFCW, are at 58.7%. Seven locals at the United Brotherhood of Carpenters fare better at 67%. As a rule of thumb the government considers a fund to be ‘endangered’ at below 80%, and in ‘critical’ status at below 65%, and requires them to come up with a plan to get off probation within a decade. …
“We suspect most current union members would be surprised to learn how their leaders are handling their hard-earned retirement money. The 93% of the private workforce that doesn’t belong to a union, but that might have little choice if Big Labor’s agenda becomes law, would be even more interested.”
Editorial, “Union Pensions in the Red,” Wall Street Journal, 07.26.09
Indeed they should. As some media outlets have reported, the so-called Employee Free Choice Act could force businesses – through its controversial binding arbitration requirements – to pick up the slack in paying a union’s underfunded pension plan.
The fact that union pensions have little cash is a serious problem. But using the Employee Free Choice Act to fix it – with its terrible effects on jobs and the economy – would make the cure worse than the disease.
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