Union Pension Plans Dangerously Unfunded

[MKSheppard]

Link

Ignore the first part of the blog post, detailing the Obama administration's preferential treatment for Unions and their leaders. I don't think anyone (you or me) is particularly interested in it.

The interesting part is this:

How bad off are the union pension plans? The best single indicator of a plan’s financial health is its Funding Percentage. A fully funded plan will have a funding percentage of 100%. A plan is underfunded when the percentage is below 100%. The lower the percentage, the greater the risk that benefits will not be available when they come due.

According to the Pension Protection Act of 2006 multi-employer (plans set through unions and company sponsors) plans are evaluated via their funding levels. To ensure retiree benefits are protected, when a multiemployer plan falls below certain funding levels, stronger funding requirements become effective under provisions of the Pension Protection Act of 2006. Plans whose funding levels are below 80% are referred to as “endangered,” while those below 65% are referred to as “critical.”

The list of 108 union pension plans below is from the Moody's September 2009 report. The ones in green print are at the endangered level, the ones in red are critical.

. Alaska Hotel & Restaurant Employees Pension Plan 79.70%
. American Federation of Musicians & Employers Pension 78.90%
. Teamsters Local 639 Employers Pension Trust 76.10%
. Producer-Writers Guild of America Pension Plan 75.90%
. Ohio Operating Engineers Pension Plan 75.70%
. Laborers District Council and Contractors Pension Fund of Ohio 75.40%
. Southern Nevada Culinary & Bartenders Pension Trust 75.40%
. Alaska Electrical Pension Plan 74.30%
. Alaska Laborers - Employers Retirement Fund 73.70%
. Electrical Contractors Assoc. of City of Chicago Union 134, IBEW Jt. Pension 2 73.70%
. Carpenters Retirement Plan of Western Washington 73.10%
. Automotive Industries Pension Plan 72.40%
. American Maritime Officers Pension Plan (2005) 72.40%
. United Mine Workers of America 1974 Pension Plan 72.30%
. GCIU Local 119B NY Printers League Pension Fund 71.40%
. National Elevator Industry Pension 71.00%
. Western Conference of Teamsters 70.60%
. Newspaper GUILD of NY the New York Times Pension Plan 70.50%
. Chicago District Council of Carpenters Pension Fund 70.10%
. District No. 9, IAM and Aerospace Workers Pension 69.70%
. Rocky Mt. UFCW Unions & Employers Pension Plan 69.50%
. Hotel/Casino - Summary 69.50%
. NECA-IBEW Pension Trust Fund 69.20%
. Central Pension Fund of the IUOE and Participating Employers 69.20%
. AFTRA Retirement Plan 68.90%
. Carpenters Pension Trust Fund of St Louis 68.60%
. MA State Carpenters Pension Fund 68.60%
. National Automatic Sprinkler Industry Pension 67.80%
. Midwest Operating Engineers Pension 67.80%
. Retail Clerks Pension Plan 67.70%
. Electrical Workers Pension Fund, Local 103, IBEW 67.50%
. Building Trades United Pension Trust Fund MIL and Vicinity 67.40%
. CWA/ITU Negotiated Pension Plan 66.80%
. UFCW Unions & Employers Midwest Pension Fund 66.70%
. Laborers Pension Fund 66.70%
. Carpenters Pension Fund of Philadelphia and Vicinity 66.40%
. UFCW International Union Pension Plan for Employees 66.40%
. Alaska Teamster-Employer Pension Plan 66.30%
. Steelworkers Pension Trust (2007) 66.20%
. Hotel Industry-ILWU Pension Plan 65.70%
. National Asbestos Workers Pension Fund 65.20%
. IUOE Stationary Engineers Local 39 Pension Plan 65.20%

. SEIU National Industry Pension Fund 65.00%
. Trucking Employees of North Jersey Welfare Fund Inc. Pension Fund 65.00%
. Massachusetts Laborers Pension Fund 64.70%
. California Ironworkers Field Pension Trust 64.50%
. Carpenters Pension Fund of Illinois 64.20%
. Automotive Machinists Pension Plan 63.80%
. NJ Carpenters Pension Fund 63.60%
. The Newspaper Guild International Pension Plan 62.80%
. Minnesota Laborers Pension Fund 62.40%
. Bakery & Confectionery Union & Industry International Pension 62.30%
. Laborers National Pension Fund 62.10%
. Operating Engineers Pension Trust 61.70%
. UFCW Unions and Food Employers Pension Plan of Central Ohio 61.30%
. UFCW Nothern California Joint Pension 61.00%
. Carpenters Pension fund of Western Pennsylvania 60.80%
. Newspaper and Mail Delivers - Publishers Pension Fund 60.50%
. Carpenter Pension Trust for Southern California 60.40%
. BERT Bell Pete Rozelle NFL Player Retirement Plan 60.00%
. Major League Baseball Players Pension Plan 59.60%
. Sheet Metal Workers Pension Plan of S. CA, Arizona and Nevada 59.50%
. NY District Council of Carpenters Pension Plan 59.30%
. SO CA UFCW Union Joint Pension 58.40%
. National Electrical Benefit Fund 58.20%
. Boilermaker Blacksmith National Pension 58%
. GCIU-Employer Retirement Fund 57.60%
. ILWU-PMA Pension Plan 56.90%
. Masters, Mates & Pilots Pension Plan 56.60%
. Wisconsin Carpenters Pension Fund 56.50%
. Electrical Workers Pension Trust Fund of Local Union 58 55.80%
. Automotive Mechanics Local No. 701 Union Pension Fund 55.60%
. IB of T Union Local 710 Pension 55.60%
. Michigan Laborers Pension Fund 55.30%
. PACE Industry Union-Management Pension Fund 55.20%
. Pipe Fitters Retirement Fund Local 597 55.20%
. Sheet Metal Workers Pension Plan of Northern Calif 55.10%
. Central Pennsylvania Teamsters Defined Benefit Plan 55.10%
. NY Hotel Trades Council and Hotel Association of NYC Pension Fund 55.10%
. Teamsters Joint Council No. 83 of Verginia Pension Fund 54.90%
. National Integrated Group Pension Plan 54.50%
. Plumbers & Pipefitters National Pension 54.50%
. Central Laborers Pension Fund 54.20%
. Iron Workers District Council of Southern Ohio & Vicinity Pension Trust 53.90%
. Carpenters Pension Trust Fund for Northern California 53.70%
. Bricklayers & Trowel Trades International Pension Fund 53.60%
. Western Pennsylvania Teamsters and Employers Pension Plan 53.10%
. Chicago Newspaper Publishers Drivers Union Pension Trust 52.90%
. OE Pension Trust Fund 52.40%
. Indiana State District Council of Laborers & Hod Carriers Pension Fund 51.70%
. NYS Teamsters Conference Pension & Retirement Fund 51.40%
. LIUNA National Industrial Pension Fund 50.30%
. Michigan Carpenters Pension Fund 50.20%
. Twin City Carpenters Pension Fund 50.20%
. Laborers Pension Trust Fund for Northern California 50.00%
. HERE Local 25 and Hotel Association of Washington, DC Pension 49.30%
. Central States SE&SW 48.50%
. Teamsters Pension Trust of Philadelphia and Vicinity 48.50%
. Operating Engineers Local 324 Pension Fund 47.30%
. Laborers District Council of W. PA Pension Fund 46.80%
. Iron Workers Local No. 25 Pension Trust Fund 46.40%
. Local 705 IB of T Pension Trust Fund 46.30%
. Building Service 32B-J Pension Fund 42.30%
. Carpenters Pension Trust Fund Detroit & Vicinity 41.40%
. New England Teamsters & Trucking Industry Pension 40.50%
. FELRA and UFCW Pension Fund 39.80%
. Local 804 I.B.T. and Local 447 IAM UPS Multi-employer Retirement Plan 39.70%
. Sheet Metal Workers National Pension Fund 38.00%

THis is one reason why the Unions are pushing so hard for Card Check, so that they can bring in new suckers members to pay into their pension plans via paycheck deductions. Well, that and their declining political fortunes...

[Guardsman Bass]

My dad's a member of the Teamsters working at YRC, and he's been talking about that a lot. Apparently they split the burden of the pension plan among several companies, but right now YRC and another company are the only ones paying into it, meaning that they're getting stuck not only with the burden of their own pensioners, but also those of other trucking companies.

THis is one reason why the Unions are pushing so hard for Card Check, so that they can bring in new suckers members to pay into their pension plans via paycheck deductions. Well, that and their declining political fortunes...

Perhaps you can find something to be happy about in the decline of private sector unions, but I'm not so pleased. Aside from the personal effect (my dad's a Teamster), those unions played a major role in actually getting decent wages for a whole swathe of the workforce (whether with directly unionized companies or the "union threat" causing rival non-union firms to raise wages).

[KrauserKrauser]

Why do the Unions get off from the responsibility of funding their own pension plans? How exactly is it the company's fault if they can't manage their money correctly/competently?

If a company can't fund it's obligations it goes bankrupt, somehow Unions shouldn't be effected by that basic principle?

Unions are mismanaged and allow to suck their dependent companies dry and never held responsible because THEY ARE FOR THE WORKERS!!!!!!!!

Where does it start making sense that a mismanaged union has the right to drag the companies that provide the jobs into bankruptcy with them?

[Teebs]

Why do the Unions get off from the responsibility of funding their own pension plans? How exactly is it the company's fault if they can't manage their money correctly/competently?

If a company can't fund it's obligations it goes bankrupt, somehow Unions shouldn't be effected by that basic principle?

Unions are mismanaged and allow to suck their dependent companies dry and never held responsible because THEY ARE FOR THE WORKERS!!!!!!!!

Where does it start making sense that a mismanaged union has the right to drag the companies that provide the jobs into bankruptcy with them?

Is it an American thing for unions to actually have their own pension plans? Admittedly I'm not actually in the workforce yet and my intended career is in a thoroughly non-unionised business (law), but my impression is that in the UK companies fund pension plans for their workers and unions' only role in that is negotiating the term of those plans.

[Ekiqa]

Those are still better than the Canadian Government employee's fund, which has zero dollars in it as the government raids it for cash all the time.

Unions are still the only bodies that will fight for workers. Government institutions that are supposely to protect workers are set up to protect the employers.

[KrauserKrauser]

Unions serve a function, no doubt about that. Historically they did some great things for worker's rights and that is to their credit. There is more than likely some use for unionization in some fields that are currently unionized, though I can't think of any off the top of my head.

How that justifies every Unions existence and grants them the right to drain their parent companies dry when they fuck up their financing is where I fail to see the connection. I work for a company that was willing to buy up the attached Union pension plan to gain control of it to prevent this shit from happening because heaven fucking forbid a Union having to be responsible for poor money management, they exist FOR THE WORKERS! they can't be held accountable for their actions in any meaningful way.

[Illuminatus Primus]

The idea that except for a couple retard cases like Detriot and government service employees, that unions are the cause of their ills is quite frankly absurd. The U.S. is the least labor organized advanced capital economy, and that trend has been relentlessly pushed for the last thirty years, with about the effects you'd expect in the wages and labor conditions for the working and middle classes.

[Stargate Nerd]

I currently work as a temp at a financial services company and my job entails looking through the financial statements of German and American companies to look for amongst other things pension obligations. Believe me when I say that whether here or overseas, union or non-union, almost every company I've seen has a HUGE gap in their pension funds/assets and their projected benefit obligations. In most cases the obligation is up to 100% greater than the assets.

[Atlan]

I currently work as a temp at a financial services company and my job entails looking through the financial statements of German and American companies to look for amongst other things pension obligations. Believe me when I say that whether here or overseas, union or non-union, almost every company I've seen has a HUGE gap in their pension funds/assets and their projected benefit obligations. In most cases the obligation is up to 100% greater than the assets.

Pension funds in the Netherlands are required by law to have a coverage of at least 105%, to be able to compensate for unexpected shortfalls. Because of the crisis several large funds fell below this, and had to institute all sorts of measures to compensate.
Interestingly enough, most of these funds would have been out of trouble if interest rates would have been one single percent higher...

[adinnhall]

Employees make contributions to their pension, or take a slightly lower wage in order to be able to collect a pension at a later date. When you have an unfunded pension plan, this means that the company didnt make any savings over the year to cover employees now receiving a pension.