Tag: Aharon Friedman

Multiemployer Pensions: Will the Recent Bailout Destroy Pensions (in the Long Run)?

Mary Pat Campbell

Link: https://marypatcampbell.substack.com/p/multiemployer-pensions-will-the-recent

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I think it unlikely that Congress, at least this Congress, will pass any MEP reforms. The bill allowing for MEP benefit cuts passed under Obama, during his second term – with a Republican House and a Democratic Senate.

There may eventually be MEP reforms, but with a big cash injection into Central States Teamsters, the reckoning day has been pushed off.

The real crisis was Central States Teamsters going under. It would have taken down the PBGC. The puny plans like Warehouse Employees Union Local No. 730 Pension Trust (total liability amount: $474,757,777) are drops in the bucket compared with Central States (total liability amount: $56,790,308,499).

Author(s): Mary Pat Campbell

Publication Date: 5 April 2021

Publication Site: STUMP at substack

To the union allies of the victor go the pension spoils

Mary Pat Campbell

Link: https://www.washingtonexaminer.com/opinion/op-eds/to-the-union-allies-of-the-victor-go-the-pension-spoils

Excerpt:

Last week, the House Ways and Means Committee approved a massive taxpayer bailout of private sector multiemployer defined benefit pension plans, or MEPs, as part of a budget reconciliation package that is purportedly meant to deal with COVID-19. Senate Budget Committee Chairman Bernie Sanders claims MEPs are underfunded because “of the greed on Wall Street.” But MEPs are troubled because of mismanagement, not because of COVID-19 or Wall Street.

MEPs are jointly sponsored by a union and companies employing members of that union. It is not clear why taxpayers, who had no role in making these pension promises, should be funding them.

The proposal would saddle taxpayers with unfunded pension promises made by eligible MEPs, which are underfunded by more than $100 billion, while providing perverse incentives for other MEPs to subsequently qualify. This would be extremely expensive as MEPs are already underfunded by $673 billion as of 2017 (a funding ratio of 42%).

Author(s): Aharon Friedman

Publication Date: 15 February 2021

Publication Site: Washington Examiner