WSJ: EFCA to Bail Out Suffering Union Pension Plans, While Union Officers' Plans Remain Healthy
As the attention has somewhat shifted from EFCA's card-check provision toward the bill's (equally or more) troubling mandatory interest arbitration provision, people have started to recognize the bill's many potential pitfalls for employers. One critical issue gaining even more attention is the likelihood that interest arbitration proceedings might be used to resuscitate horribly crippled union pension funds on the backs of employers who have no responsibility for their deplorable current conditions.
Many astute observers have long been warning about this crisis. The Hudson Institute's Diana Furchtgott-Roth last summer published an eye-opening study, "Union vs. Private Pension Plans: How Secure Are Union Members' Retirements?" Ms. Furchtgott-Roth's Executive Summary included these observations:
In 2005, the latest full year of data available, collectively bargained pension plans were more poorly funded than their non-union counterparts. Large plans, those with 100 or more participants, strongly showed this pattern. While 36.5 percent of nonunion plans were fully funded,1 only 19 percent of union plans met this criterion. The Pension Protection Act of 2006 considers funds underfunded, but not “at-risk,” if they are at least 80 percent funded. While nearly 90 percent of non-union plans met the funding threshold of 80 percent, only about 60 percent of union plans were not “at-risk.” Among collectively bargained pensions, around 11 percent were only 65 percent funded, low enough to put the larger national plans in the heavily-penalized “critical” category. Only two percent of non-union plans were in this condition.
Months ago, D.C. concrete contractor Brett McMahon noted in an Examiner Op-Ed, that "Card Check could kill my company and yours." Around the same time, the American Spectator featured remarks by Mr. McMahon in a piece of its own, "A good time to start liquidating."
Now, yesterday's Wall Street Journal carried a piece entitled "Union Pensions in the Red," which editorializes on a particularly curious aspect of Ms. Furchtgott-Roth's findings: that Union Officers' and staff pension plans are far out-performing the rank-and-file plans, and are not suffering the same critical underfunding status. Per WSJ:
Poor management probably deserves a lot of the blame for the union decline, but the exact causes are a mystery. An even bigger mystery is that the unions do a far better job with funds created for their officers and employees than for mere workers. The SEIU Affiliates, Officers and Employees Pension Plan—which covers the staff and bosses at its locals—was funded as of 2007 at 102.2%. The plan for the folks at SEIU international headquarters was funded at 84.8%.
More coverage of these issues:
- "Link Between Failing Union Pensions and Card-Check" -- TheTruthAboutEFCA.com
- "The Shame of Unions: Massively Underfunded Pensions" -- Reason Online
- "Card-Check: Debt-Ridden Union Pensions Behind EFCA Push" -- ShopFloor.org
- "Card Check 'Lite' Is a Non-Starter" -- (Steven Law) on CBS News
