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Unions Pensions Going Broke?

Discussion in 'Politics, Elections & Legislation' started by wireguy, Oct 20, 2010.

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  1. wireguy

    wireguy TS Member

    Jan 29, 1998
    Armageddon: What Democrats Are Hiding & Why They Are Really Scared

    If Democrats were running a corporation, their actions would be criminal.

    Posted by LaborUnionReport (Profile)

    Tuesday, October 19th at 2:00PM EDT

    Unions and Democrats are scared. They should be.

    Very soon, Democrats and their union bosses’ worst fears may soon be realized and, if they cannot continue their slight of hand, it may threaten their very existence. While it is true that Democrats and their union bosses are facing possibly debilitating losses on November 2nd, they are hiding the really bad news from voters until after November 2nd.

    Do you remember that promise we heard back in 2008 about transparency? Democrats and, in particular, then-candidate Barack Obama stated emphatically that “transparency and the rule of law will be the touchstones of this presidency.” What a joke that was. Well, it’s time to shed some light on the house of cards that is about to come crashing down on Democrats’ and union bosses’ heads.

    “This is Armageddon.”

    In June, a conversation took place in a hotel restaurant in Washington. As a latecomer to the conversation, it was easy to pick up that the topic that was the $165 billion union pension bailout bill introduced by Sen. Bob Casey [D-PA] in March.

    Upon introductions, one of the individuals stated, “this is Armageddon.”

    When asked for clarification, the person explained about the accounting rules developed to shore up underfunded union pensions and the dates when those union companies affected would have to assume their liabilities had the DC crowd (in particular, the Democrats and the unions) in a panic.

    Yesterday, the Washington Examiner’s Mark Hemingway gave a good breakdown of how bad it could get for Democrats and their union bosses:

    On Nov. 1, the Financial Accounting Standards Board (FASB) ceases to take public comment on a new rule requiring that companies more accurately report liabilities they have from participation in multiemployer pension plans. Unless FASB is persuaded otherwise, the rule takes effect Dec. 15.

    There are some 1,500 multiemployer pension plans in the United States, which are unique to unions. In these plans, multiple companies pay into the pension plan, but each company assumes the total liability.

    Under “last man standing” accounting rules, if five companies are in a plan and four go bankrupt, the fifth company is responsible for meeting the pension obligations for the employees of the other four companies.

    What this means is that companies with union labor often have pension liabilities that are several multiples higher than the pension expenditures they report — the Kroger grocery store chain shocked analysts last year when it disclosed its multiemployer pension liabilities more than doubled in a year to $1.2 billion.


    FASB’s new rule could effectively wipe out the paper worth of many companies, especially in the trucking and construction industries. Once banks and creditors are aware of these staggering pension liabilities, it will make it nearly impossible for union businesses to get loans, credit lines or bonding.

    The effects of having to meet reality will almost certainly cause a significant drop in stock prices for those companies affected and, as a result, may cause a large ripple effect throughout the rest of the economy. In those cases where the liabilities exceed the value of the unionized companies, it is entirely possible many of those companies will go out of business, laying off tens of thousands of employees, and further causing a drop in economic activity.

    Some companies risk having their ratings downgraded, especially if weaker companies become bankrupt and leave the pension plans.

    One example of a company that would likely go out of business is YRC trucking, which employs approximately 35,000 Teamsters. While the freight currently carried by YRC would likely be picked up by other carriers (many of which are non-union), the loss of members (and their dues) would be devastating for the Teamsters and the Democrats.

    Right now, before November 2nd, Democrats don’t want voters to know that their union benefactors may further cause the economy to fall further or more companies to close and jobs to be lost. As a result, Democrats are not talking about it on the campaign trail. Instead they’re hoping they can work out a scheme during a lame duck session, sticking taxpayers with another $165 billion union bailout.

    Without the bailout though, as we noted in July, unions and Democrats face a bleak future:

    On the other hand, even though Democrats know that another union bailout will likely make them even bigger pariahs with the American people, the very survival of their party rests on their ability on passing this poisonous piece of legislation. If they fail, the ramifications for the Democrats are disastrous.

    As opposed to taking more from taxpayers and adding more to the debt or creating another Ponzi scheme, the Competitive Enterprise Institute’s F. Vincent Vernuccio offers some alternatives to the union pension bailout:

    The entire multiemployer model needs to be rethought. The funding and disclosure standards of the PPA and FASB are a good start but more needs to be done. Unions who use their pensions for recruitment should be required to tell prospective union members if the retirement packages they are touting are in critical or endangered status. Any mention of government insurance should be accompanied by the caveat that multi-employer plans are only insured by up to $12,870.

    No worker should be forced into a critical status pension fund. They did not make the promises to current employees and retirees and should not be forced to pay into a broken system.

    Union members should be allowed the same mobility and retirement control as the other three quarters of workers receiving pension benefits in America. Defined contribution (DC) plans should be encouraged for new workers. Older members should be given the option to opt-out of failing pension plans and convert the money they receive into a DC plan.

    If all contributing employers or a majority of beneficiaries agree, a multi-employer plan should be terminated if the ratio of employees to retirees reaches 1 to 1 – in 2007 before UPS withdrew; the Teamsters Central States Plan covered 451,000 workers with only 155,000 currently employed. A system where one worker is supporting three retirees is doomed to failure. Instead of having decades of future liabilities, employers should be given an option of a onetime buyout of failing union pensions.

    America is careening toward bankruptcy. While blame can initially be laid at the feet of both parties, over the last 20 months, Democrats’ meddling in the private-sector, out-of-control spending, and sheer ineptitude in recognizing the job-killing policies they promote have pushed the nation closer to the precipice.

    Now, with two weeks before November 2nd, Democrats are hiding the fact that financial Armageddon may be right around the corner. If Americans are the ’shareholders’ and politicians are the executives in charge, the lack of disclosure on the part of Democrats would be criminal.


    “I bring reason to your ears, and, in language as plain as ABC, hold up truth to your eyes.” Thomas Paine, December 23, 1776
  2. likes-to-shoot

    likes-to-shoot Well-Known Member

    Oct 6, 2006
    Wireguy........you should state which unions you are talking about. I guarantee you that the one I belong the pension is solvent.
  3. Gapper

    Gapper TS Member

    Feb 26, 2010
    I'll guarantee no pension is solvent in a bankrupt country.
  4. 391 shooter

    391 shooter Well-Known Member

    Jun 3, 2008
    I am sorry to hear that, but, my Pension that I tried to put together through the 401K program has been shot to hell as well. ( I am non union and will always stay non union)

    I let wallstreet and financial advisors rob me blind, it's my fault, I except it and am moving on with a different strategy.

    Union pensioners need to do the same thing, get over it and move on. Retiring at 45 to 55 days are over unless you are really well off.

    The current Government (state local and national) pension programs make as much sense as the recent debockle in the mortgage and housing industry, totally unsustainable.

    How can you have 1 person working and 3 to 4 retired at 90% salary and benifits from the same position, DUH!
  5. J.Woolsey

    J.Woolsey Member

    Aug 12, 2007
    I believe you will find that having a fox guard the hen house, will eventually lead to an empty hen house. J.W.
  6. daddiooo

    daddiooo TS Supporters TS Supporters

    Jan 29, 1998
    These are retirement funds run by people who don't understand simple math.

    When you're broke ....you're broke.

    The fat lady hasn't sung yet but she's lineing up her sheet music.
  7. ysr_racer

    ysr_racer Active Member

    Jan 29, 1998
    These three kids are sitting around talking, and the first kid says, "My dad is so fast, he can shoot an arrow down range and run down there to see where it lands".

    The second little kid says, "That's nothing, my dad is so fast, when he goes to sleep at night and turns off the lights, he can be in bed before the room gets dark".

    The third little kid says, "I got all you guys beat. My dad is in the Teamsters. He's so fast that when he gets off of work at 4:30, he's home by 2:15".

    Brought to you by the non union workers of America. Unlike you, I work for a living.
  8. crusha

    crusha TS Member

    Jan 29, 1998
    All right, union folks...put on your little "Frenchie" berets and march around the street, protesting for this bill...I can hear it now, "Wall Street got a bailout, how about one for WORKING FAMILIES..."
  9. The Rock

    The Rock Active Member

    Jan 29, 1998
    What little I have is securely funded. It is the IAM fund. They are the fund. The company paid into the fund run by the union every week. The government in this one case audited them yearly. It is not a 401K but a union run retirement fund.

    The Company did not keep the money in their slush fund. Was not great but it is still there fully funded.

    Company run 401K's are a risk at best.


  10. Leo

    Leo Well-Known Member

    Jan 29, 1998
    Wait until the Government gets involved with "helping the situation" Since I was not old enough to retire when my job went away, my earned pension was "frozen" until I was. in 2009 a Federal judge signed orders dismissing Chrysler from paying pension to anyone else that was no longer working there and had earned a partial pension. I'll bet that damned judge still gets his pension. Everyone said the UAW will not let them do that. Well, guess what?

    And as a side note, I was a controls tech taking care of the largest transmission machining operation in the world. Seventy seven ACRES of automated machine tools under that roof. I worked hard from the minute I walked in the door to the minute I punched out, including forced overtime on weekends. So to all the non union jerks who think I sat on my backside while drawing easy pay, you are dead wrong, and I am tired of your 1/2 truth union stories. I have been management in non union facilities and they pay less then union shops, but the employees have a pretty marginal skills and work ethic, you pay for cheap, you get cheap. By the way, the UAW did not make me, I was recruited because of my skill set from other industries.
  11. Don Steele

    Don Steele Well-Known Member

    Jan 29, 1998
    Florida's beautiful E. Coast
    From "Human Events"....

    New Lame Duck Threat to Bailout Union Pensions
    by Connie Hair


    Democrats in the Senate on Thursday held a recess hearing covering a taxpayer bailout of union pensions and a plan to seize private 401(k) plans to more "fairly" distribute taxpayer-funded pensions to everyone.

    Sen. Tom Harkin (D-Iowa), Chairman of the Health, Education, Labor and Pensions (HELP) Committee heard from hand-picked witnesses advocating the infamous "Guaranteed Retirement Account" (GRA) authored by Theresa Guilarducci.

    If you think the Democrats aren't waayyyyy ahead on this..already working on a plan to make ALL OF US pay off their buddies in BIG LABOR...
    you simply have not been paying attention.
  12. zeroed4x

    zeroed4x TS Member

    Aug 22, 2010
    These bail outs are simply another form of Socialist indoctrination.
    Democrats and most other bureaucrats don't give a damned about saving
    you and your precious pension plan because it has been pissed away.
    Its grand standing and posing to save their desperately needed support.

    How dare they use tax payer monies to bail out pension plans.
    Someone previously mentioned "Fox guarding the hen house"

    Sometimes you simply have to shoot the fox for the sake of the hens.

    Better vote in November.

  13. Bob Hawkes

    Bob Hawkes Well-Known Member

    Jan 29, 1998
    Don Steele, For whatever reason I forsaw this a couple of years ago and have expressed great fear to our group plan that the Government would do this. Part of the Health Care bill was access to all of our financial accounts. God save America.
  14. skeezix

    skeezix Member

    Jan 29, 2006
    likes-to-shoot. If you think your fund is fully funded, I suggest you call your pension fund administrator and ask them specifically what is the percentage funded of the vested benefits and what is the percentage funded of the total benefits.

    Unless you have an extremely conservative investment portfolio I'd be surprised if either were anywhere near 100% funded. Some state employee unions investments were limited to t-bills and similar funding investments- they are or were not allowed to invested in stock funds. Those investments maintain a pretty safe rate of return - but they also carry a pretty limited level of retirement benefits.

    Most pensions I'm aware of have an actuarial assumption of 7% to 7-1/2% income on investments. So in 2008 when the stock market was down some 20% that meant your investments were nearly 27% blow the actuarial assumpion (assuming your investments performed within a percentage point or two of their benchmark funds.) Funds don't survive long at that level of loss.

  15. southjblue

    southjblue Active Member

    Jan 29, 1998
    If I had a pension from a union I'd be very concerned---Better check with your union and get a statement in writing as to your future and post that statement on TSs---That will end your quest and won't need any more info concerning the subject---amen---Mystic---
  16. halfmile

    halfmile Well-Known Member

    Jan 29, 1998
    Green Bay Wisconsin
    Much of the Democrat political funding comes from unions.

    Duuuuuhhhhh Gee........where did my pension go?

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