Posted on 04/07/2013 7:59:37 AM PDT by markomalley
Many unions are facing a serious looming problem: Drastically underfunded pension plans. The hole may be as deep as $369 billion. That’s giving businesses that are tied to the plans the willies.
The way many unions plans work is that several different businesses that represent the workers pay into a common fund. If one business goes under the remaining are legally obligated to cover that company’s pension obligations. That has many businesses looking to get out of these plans early. That’s especially true with those paying into the Teamsters pension fund, the Wall Street Journal reports:
Some companies are pushing to withdraw their workers from a giant Teamsters pension plan that faces a deep funding shortfall and questions about its long-term viability.
Investment losses during the financial crisis and hard times for trucking companies that pay into the Teamsters’ Central States Funds have sapped the fund of money it uses to pay promised benefits.
With just 60 cents of assets for every $1 in obligations, the Teamsters pension fund is considered in “critical” status by the Pension Benefit Guaranty Corp., the federal agency that backstops failed pensions.
Central States has about $18 billion in assets, ranking it the nation’s second-largest multiemployer pension plan. Such funds get contributions from numerous companies.
The Teamsters pension fund pools money from about 1,900 companies, and its investments have been overseen by advisers jointly approved by representatives for union and management.
Recent efforts by Republic Services Inc. to pull out about 800 sanitation workers from Central States show the uphill battle facing a pension plan founded by the late Teamsters President Jimmy Hoffa.
Last week, Republic Services finalized deals with three local Teamster unions in Michigan to move out of Central States to a better-funded Teamster-run plan. Food service distributor Sysco Corp. removed its last Teamster unit from Central States in January.
“There is a reasonable possibility that this plan could run out of money in about a dozen years,” Central States Executive Director Thomas Nyhan said in an interview.
More companies leaving the fund “accelerates insolvency,” Mr. Nyhan said.
Read the whole thing here. It’s a major problem for unions because their pension plans are a major part of their appeal to workers.
Why am I not crying any tears over these union thugs problems ?
It's the law.
Why would a company go for this in the first place? Who knows what the viability of the other companies is? This is insanity.
On the other hand, Obama will use a stimulus to bail them out (just like GM).
You probably should be as you and I will end up shoring these plans up.
I think UPS has been trying to get away from these Teamster pension funds for years.
That cannot be right, I recall Hoffa saying that the loans to the gangsters to build a string of casinos in Las Vegas in the 60s were money makers for the fund and not one dime was lost. Perhaps when they were lending to the mobs they made money but when they began buying off politicians they did not get any return on their dollars??
The teamsters supported Obama, now let them live with the consequences.
Pension fund shortfalls, increasing number of bankrupt cities, student loan deliquincies and defaults, ballooning federal deficit and debt, and massive unemployment. The financial crises are building serious momentum. Can a game changing event be that far away? Buckle up.
Given that the Teamsters have killed so many trucking companies the pension sharing plan shows foresight. Although it does beg the question of; did they plan to kill off companies?
That stated, I think after they killed off CF they realized that they have to start to work with companies more. When the recession hit YRC (aka Yellow Brick Roadway)took first a 10% cut, then a 5% cut shortly after to keep the company afloat. I think they finally started to get some back recently. I’m not sure if they are funding the pension again yet.
In contrast at my non-union trucking company we took a 5% cut, got 1/2 back the next year and the other half back the year after that. And no, YRC was not making more than we were.
Don’t hold back from crying just yet... Union goons prop up liberal elites - that bunch will find a way to take YOUR taxpayer money and bail out the union crooks.
What’s the big deal? Just have the union raise their dues on their members.
Mark
We NEED a bankruptcy of a major state or union pension fund, and the ensuing political debate, to spotlight changes to entitlements and Gov’t union corruption that must be made
Its a Rahm Emanual “don’t let a crisis go to waste” opportunity for conservatives. Let’s hope it happens soon.
couple things,
If it’s bad for unions it’s good for America.
I don’t give a rats patootie if unions have problems.
You understand the system well.
Well, since the billionbs which have been stolen from the funds to keep getting democrips elected and fund ‘community activism’ groups, what would we expect from criminals but to raid the tax coffers to repay their funds for future use?
Disclaimer: Opinions posted on Free Republic are those of the individual posters and do not necessarily represent the opinion of Free Republic or its management. All materials posted herein are protected by copyright law and the exemption for fair use of copyrighted works.