Workers Escape From Union Pension Morass

Big Labor Monopoly Privileges Linked to Retirement Insecurity

Early last December, front-line employees of the Kroger grocery chain were finally allowed to escape from a grossly underfunded pension scheme known as the “National Plan.” The National Plan is effectively controlled by top officers of the United Food & Commercial Workers (UFCW/AFL-CIO) union.

Unionized Kroger employees, along with unionized employees of the Albertsons and Stop-n-Shop grocery chains, were able to get into a new, far more secure and stable pension plan because their employers were willing and able collectively to fork over nearly $2 billion to the National Plan to get them out.

The three grocery store chains believe this hefty tab is worth it, because in the future they will be able to attract and retain employees by offering them fully funded and secure pension benefits.

Anti-Worker Federal Labor Law Often Blocks Employers From Offering Good Benefits

“It is definitely good news that Kroger, Albertsons, and Stop-n-Shop have obtained UFCW union bosses’ permission to move more than 50,000 workers out of the deeply troubled UFCW National Plan,” said National Right to Work Committee Vice President Mary King.

“The variable annuity plan these same workers are joining is designed, as Stop-n-Shop parent company Ahold Delhaize has explained, ‘to protect the benefit accruals of participants, with significantly reduced risk of plan underfunding and improved visibility of annual contributions.’

“In contrast, the UFCW National Plan has been miserably mismanaged and was just 53.5% funded at the time it most recently filed a Form 5500 with the IRS.  

“Unfortunately, roughly 30,000 participants, mostly active, remain stuck in the UFCW National Plan.

“And an estimated 10 million active employees and retirees across the U.S. remain stuck in other Big Labor-dominated ‘multiemployer’ pension plans, of which an alarmingly high share are in miserable shape.

“As economist and commentator Ike Brannon noted at the end of 2020, seven multiemployer plans had sought and obtained federal permission to cut benefits in the preceding 12 months. Almost 10% of all multiemployer plans ‘are expected to run out of money within 20 years,’ Dr. Brannon added.  

Marc Perrone
Marc Perrone and other UFCW chiefs should be held accountable for grocery workers’ underfunded pensions. (Credit:

“No wonder many of the employees whose retirement money is still being put into a multiemployer fund would love to get out.

“Their employer is typically willing to oblige them. But under longstanding federal policies authorizing and promoting union monopoly-bargaining control over employees, shifts out of multiemployer funds can only happen with Big Labor’s acquiescence. And union bosses rarely agree to let employees out unless, as was the case in UFCW kingpins’ recent deal with Kroger, Albertsons and Stop-n-Shop, the multiemployer fund gets a massive payoff in exchange.” 

Bailout of Underfunded Pensions Could Cost Taxpayers $600 Billion or Even More

Ms. King added that a key Big Labor objective during the Biden presidency is to ram through Congress a taxpayer-funded bailout of hundreds of insolvent multiemployer pension plans (MEPPs) at an estimated cost of $600 billion or more.

“MEPPs like the UFCW National Plan are now in deep trouble primarily for one reason,” she noted.

“For years, the contributions going in, with the amounts directly determined through union monopoly bargaining, were insufficient to pay for the benefits that union bosses and their agents told workers they would provide.

“President Joe Biden and other pro-forced unionism politicians are pushing for a bailout of MEPPs, possibly through low-cost, subsidized loans that are guaranteed by taxpayers.

“This could temporarily keep mismanaged MEPPs afloat. But it would fail utterly to hold union bosses and certain employers who colluded with them responsible for shorting workers out of their contracted compensation.

“Since, as American Enterprise Institute resident scholar Andrew Biggs has emphasized, the ‘retirees threatened by multiemployer pension insolvency are themselves blameless,’ a MEPP bailout of some kind may be inevitable.

“But it would be an insult to taxpayers to furnish assistance to workers and retirees MEPPs have victimized without taking concrete, meaningful measures to ensure the MEPP fiasco is not repeated.

“Dr. Biggs recommends, to start with, putting failing plans in receivership.

“That makes sense. 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.”