Modern News

We’ve mentioned it here and there in the past, but one of the under reported stories about unions today is that few of them have fully funded pension plans and worse, many are in dire trouble. The Wall Street Journal reminds us all of the mess that union pensions are in with a July 27 piece headlined, “Union Pensions in the Red .”

The WSJ reports on the unusual actions of the Service Employees International Union (SEIU), one of the most powerful unions in America, as it tries to fix its pension funds.

Only last week, the country’s largest union local re-opened the contract for its 145,000 members two years early and gave up raises and reduced retirement benefits for future hires. The SEIU’s United Healthcare Workers East struck this unusual deal so employers could instead plug a gaping pension hole.

The union is so desperate to replace the pension money it has wasted on other things that it is willing to give up stuff it would never give up otherwise.

Of course, like any union, what it gives up now is only the next item on the agenda to steal back at a later date, so nothing is “gone,” as it were. Just like Congress, no bad idea is ever off the table forever.

Anyway, the pension mess is not just a problem for the SEIU.

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.

Naturally, the whole reason for this is because union pension plans can only be funded fully with constant wild growth because they are so over generous. Of course, it would help if unions weren’t constantly stealing money from the pension funds too, but… you know.

The Journal also notes something we’ve pointed out in the past. The pension plans for union bosses are generally doing quite well throughout uniondom. While the lowly employees’ pensions are falling apart and going bankrupt, the pensions for union chiefs are funded at 100% and beyond most of the time.

Obviously the first people in the minds of the union bosses is union bosses and not the membership. I agree with the WSJ. I wonder how union members would feel if they fully understood how little their union chiefs care about them?