House Panel Rewards Failing-Union-Pension Managers
Union Dons Who Shortchanged Workers Would Be Let Off
blems facing lawmakers in Washington, D.C., today, one of
the thorniest is what to do about an estimated $600 billion or more in unfunded
pension promises to employees made by “multiemployer” pension plans (MEPPs).
These are private retirement funds that are controlled by
Big Labor in partnership with unionized companies.
Hundreds of the roughly 1,400 MEPPs across the country are
now in deep trouble primarily for one reason:
For years, the contributions going in, with the amounts
directly determined through union monopoly bargaining, were insufficient to pay
for the pensions that union bosses and their agents told workers they would
Union-label Democrat politicians are now turning up the
pressure on President Donald Trump and Capitol Hill Republicans to go along
with a scheme to bail out MEPPs.
And on June 11 the U.S. House Labor and Education Committee
rubber-stamped H.R.397, a MEPP bailout sponsored by union-lackey Congressman
Richard Neal (D-Mass).
Barack Obama’s ‘Parting Gift’ Has Left Many Retirees in
The price many Americans are paying for systematically
underfunded MEPPs has only gotten higher in the nearly five years since Barack
Obama signed the so-called “Multiemployer Pension Reform Act” (or “MPRA”) of
By altering 40 years of labor law, the MPRA has paved the
way for unprecedented cuts in benefits for current retirees in troubled MEPPs.
The MPRA was rubber-stamped by a “lame duck” Congress during
the Christmas season.
This happened only after Mr. Obama and then-Vice President
Joe Biden (now a contestant for the 2020 Democrat presidential nomination) both
“telephoned Democrats to secure the votes needed for passage of the [omnibus
budget] package” into which it had been inserted, according to a
contemporaneous Associated Press report.
Under the MPRA, plans that are classified as “critical and
declining” are potentially eligible to reduce pension benefits by 30% or more.
In public, union bosses try to disavow responsibility for
But the fact is, the MPRA could never have been adopted
without the support of multiple unions whose rank-and-file members, as a
consequence of this law’s passage, have either already been hit with drastic
benefit cuts, or could be in the near future.
‘The Question Is When And How [Benefit Cuts] Are Going to
In 2013, William Hite, then the general president of the
United Association of Journeymen and Apprentices of the Plumbing and
Pipefitting Industry (UA), endorsed the original blueprint for the MPRA, known
as “Solutions, Not Bailouts” (SNB), when it was issued by a commission on
multi-employer pension reform.
Mr. Hite exulted that the SNB proposal, essentially
identical in key regards to the measure ultimately adopted by Congress, would
make “retirement plans more secure.”
Tom Nyhan, executive director of the Teamster Union’s
Central States, Southeast & Southwest Areas Pension Fund, was unapologetic
about the fact that the SNB plan would cut retiree benefits sharply:
“We are going — it’s not a question of
if there are going to be benefit cuts.
“There are going to be benefit cuts. The question is when
and how they are going to happen.”
In late 2016, the pension fund co-managed by the
Cleveland-based Iron Workers Local 17 Union became the first in the U.S. to
receive approval from the Obama Treasury Department to slash benefits for its
Hundreds of Retired Iron Workers Endured Pension Cuts of
30% to 60%
Consequently, in January 2017, roughly 2,000 forced dues-
and forced fee-paying workers in northeastern Ohio faced a Hobson’s choice.
They could cast a vote in favor of losing up to 60% of their
benefits starting February 1, 2017.
Or they could vote potentially to lose all their pension
benefits when Local 17’s grossly underfunded pension plan ran out of money in
Not surprisingly, a majority of Local 17-“represented”
workers who voted reluctantly backed severe pension cuts for all but the most
elderly and/or infirm among them, rather than risk losing all of their pension
According to an analysis by the Washington, D.C.-based
Pension Rights Center, there were 336 Local 17 retirees who experienced cuts of
30% to 60%.
In the two-and-a-half
years since the Iron Workers Local 17 retirement fund took advantage of the
MPRA to slash benefits, thousands and thousands of additional unionized workers
and retirees have been subjected to pension cutbacks under the same law.
Today well over a million more unionized active employees
and pensioners know their retirement benefits could soon be targeted for major,
They are naturally worried.
Meanwhile, Big Labor is trying to deflect the blame for a
huge problem it played a central role in creating by pointing the finger at
‘A Lack of Big Labor Accountability Is the Common Theme’
Pro-forced unionism Inside-the-Beltway politicians like
Bernie Sanders, Vermont’s junior senator and a 2020 presidential hopeful, are
demanding that Mr. Trump, and Republicans in Congress, back a bailout of MEPPs, primarily through low-cost,
subsidized loans that are guaranteed by taxpayers.
If they refuse, falsely claim Mr. Sanders and other union
boss-puppet politicians, they will be responsible for whatever happens after
funds like Central States go bust.
In June, the Big Labor-controlled Education and Labor
Committee green-lighted H.R.397, the cynically mislabeled “Rehabilitation for
Multiemployer Pensions Act,” or “RMPA,” in a 26-18 vote.
National Right to Work Committee Vice President Mary King
“At first blush, it might seem surprising that many of the
same forced-unionism politicians who supported the MPRA in 2014 are now backing
“The MPRA empowers union operatives and other officers of
grossly mismanaged MEPPs to cut retirement benefits without ever having to file
“The RMPA gambles tens of billions of dollars in taxpayer
money to keep grossly mismanaged MEPPs afloat, without holding union bosses and
any employers who colluded with them responsible for shorting workers out of
their contracted compensation.
“The approaches seem different, but a lack of Big Labor
accountability is the common theme.”
Many Workers Who Now Face Steep Pension Cuts Aren’t Voluntary
Ms. King continued:
“As retirement policy specialist and current American
Enterprise Institute resident scholar Andrew Biggs observed in a perceptive
commentary last September, the ‘retirees threatened by multiemployer pension
insolvency are themselves blameless.’
“Dr. Biggs might have added that many of the workers who now
face steep pension cuts never even voluntarily joined the union whose officers
are at fault for benefit-fund mismanagement.
“For these reasons and others, an MEPP bailout of some kind
may be inevitable.
“But it would be an insult to taxpayers for Congress to
furnish assistance to the workers and retirees MEPPs have victimized without
taking concrete, meaningful measures to ensure the MEPP fiasco is not
‘It Should Be Clear to Everyone … That This Is a Pension
One of several safeguards proposed by Dr. Biggs, but
unsurprisingly not included in the MPRA or the proposed RMPA, is that “any
multiemployer plan seeking federal help should be taken over” by the Pension
Benefit Guaranty Corporation, the federal agency charged with overseeing
private retirement funds.
“It should be clear to everyone — pension participants,
employers, unions and Congress — that this is a pension disaster, not business
as usual. Putting failing plans in receivership sends that message,” explained
“Congress should definitely incorporate safeguards like
those Dr. Biggs recommends before passing any legislation to aid MEPP plan
participants,” said Ms. King.
“And ultimately Congress must end the pro-union monopoly
federal labor policies that are largely culpable for the pension shortfalls
that will surely be faced by millions of additional unionized workers over the
next two decades.”