Posted on 07/25/2018 6:59:45 PM PDT by E. Pluribus Unum
114 out of the nation’s 1,400 multiemployer pension plans covering 1.3 million workers are underfunded to the tune of $36.4 billion, with plans expected to start going insolvent in the next 5 years or so, an Aug. 2017 analysis by Cheiron has found.
This is the end result of unsustainable collective bargaining arrangements between unions and employer, creating defined benefit pension plans that promise retirements far in excess of what could be justified by monthly contributions and market returns. If these had been investment products, surely the Securities and Exchange Commission might have investigated for fraud. But because they were collectively bargained pensions, a different set of fiduciary rules apply.
Other factors leading to the shortfall include unfavorable demographics with fewer new workers joining the plan as the ratio of workers to retirees continues to drop.
Unfortunately for pensioners, that will mean a huge cut in retirement benefits should the plans go belly up. Even with federally backed Pension Benefit Guaranty Corporation (PBGC), in the event of failure, only a fraction of benefits will be paid out.
According to the PBGC, the payouts under existing law can be “summarized as a maximum guarantee amount of $12,870 per year (payments are made monthly). But that is only a special case of the guarantee; it applies to people who worked exactly 30 years in jobs covered by the plan and have a moderately high promised benefit. PBGC’s maximum guarantee is lower for participants who worked fewer than 30 years and higher for those who worked more than 30 years.”
(Excerpt) Read more at dailytorch.com ...
Public sector pension plans are in even worse shape.
If you can’t pick it up and run with it, you don’t really own it.
L
That’s a lot of potential votes. Some socialist politician is going to come along and talk about the need to “keep the promise to these unions” which will require confiscation of your money.
Could start going bad in five years...
Sure, lets dump it on Trump now. How about those insurance funds tap the businesses, and beef up their funds.
all because the unions spent million upon millions on political races instead of investing that money into their workers, PERIOD! And not a single republican in DC will utter those words.
Any bets that SEIU and the AFLCIO are at the top of the list??
Just borrow the money from the US Social Security system.
Oh, wait a minute, the politicians beat you to it.
If you read the article, it shows that it is primarily the Teamsters. The spirit of Jimmy Hoffa still lives on.
The sooner they collapse, the better. It will show what unions are all about: what’s mine is mine, what’s yours is negotiable. “Howard K. Smith”
The next democrat president/congress will bail them out.
“Of the $36.4 billion in unfunded liabilities, 47 percent or $17.2 billion is for a single plan, the Teamsters Central States fund.”
Surprised?
I’ve said it a million times
You can’t pay people NOT to work
I took the lump sum. It should be mandatory for those lucky enough to have one.
Should have gone to defined contribution plans and then let the employees decide when they want to retire.
I am now retired (I am 67) and all my pensions are from non-union employers, and all of those pension plans are sound and well-funded.
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