Unions are getting a free pass after mismanaging their multi-employer pensions for decades. In a provision not well-publicized before the stimulus bill narrowly passed by the Senate with only Democrat support, $86 billion dollars will be directed to at least185 multi-employer union pension plans that are close to collapse. According to the New York Times:
Both the House and Senate stimulus measures would give the weakest plans enough money to pay hundreds of thousands of retirees — a number that will grow in the future — their full pensions for the next 30 years. The provision does not require the plans to pay back the bailout, freeze accruals or to end the practices that led to their current distress, which means their troubles could recur. Nor does it explain what will happen when the taxpayer money runs out 30 years from now.
The pension crisis is not new and fixing it has long been a Democrat priority. Congress passed legislation in 2014 to allow insolvent pensions to pare benefits within limits to prevent bailouts by the taxpayer. However, President Obama’s Treasury Department blocked the Central States Pension Fund’s plan to use the law in 2016. The media framed this denial as an attempt to force a straight bailout, and here we are.
At the time, the responsibility to cover the fund’s projected insolvency would have fallen to the Pension Benefit Guaranty Corporation (PBGC), which had its own insolvency issues. The Central States fund was paying $3.46 in benefits for every dollar it took in due to an aging former workforce and employer withdrawals – READ MORE
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