Transfers $86 Billion From Taxpayers to Big Labor Pension Plans
Among the many provisions in the gargantuan Biden COVID-19 “relief” package that have nothing to do with COVID-19 or its economic impact, perhaps the most outrageous is an $86 billion down payment on a long-standing objective of top union bosses.
For years now, transportation, construction, grocery and other union kingpins and their allied politicians have been trying to come up with a politically acceptable way to foist on taxpayers an estimated $600 billion or more in unfunded promises that Big Labor and its designees have made to employees.
The amount of money contributed to the Big Labor-dominated retirement funds commonly referred to as multi-employer pension plans, or MEPPs, is directly determined through union monopoly bargaining.
‘Rescue’ May Well End Up Exacerbating Pension Shortfalls
And the primary reason why 96% of the 10.8 million MEPP-covered workers and retirees are in troubled plans that are less than 60% funded is simple:
The Big Labor-approved contributions going into those plans have long been and remain insufficient to pay for the benefits that union bosses and their agents tell workers they will provide.
“The $86 billion is a giveaway to notoriously mismanaged plans like the Teamsters Central States fund. And union officials and the businesses who colluded with them for years and years to underfund worker pension won’t ever be required to pay back a dime,” noted National Right to Work Committee Vice President Mary King.
“Worst of all, far from being the ‘solution’ to the MEPP morass that Joe Biden and other union-label politicians are claiming it is, this massive bailout actually sets the stage for even bigger bailouts in the future.
“$86 billion is a lot of money. But it represents less than 13% of the $673 billion MEPPs have promised in excess of what they will be able to pay, based on the contributions they are taking in and reasonable expected returns on their investments.
“By enabling MEPPS to avoid contribution increases and even to hike benefits, this bizarre bailout may well even hasten the day when dozens if not hundreds of MEPPs go bust.
“Unless, of course, union boss-owned politicians inside the D.C. Beltway grab additional hundreds of billions of dollars from federal taxpayers to keep these troubled plans afloat.”
Since MEPP-covered workers, whether they are voluntary union members or not, are not culpable for the misdeeds of Big Labor pension managers, a federal bailout of MEPPs may have been inevitable, acknowledged Ms. King.
But a genuine rescue, she added, would have to incorporate real reforms, like putting failing plans in receivership and ending the pro-union monopoly labor policies that are largely culpable for spawning the MEPP debacle.