The Examiner reports on a new Hudson Institute study that found that while rank-and-file union member pensions continue to deteriorate, pension plans for labor bosses continue to be healthy and well-funded.
The study, authored by labor economist Diana Furchtgott-Roth, examined the pension plans from 21 of the largest union and staff pension plans like the SEIU and UNITE HERE.
As of 2005, none of the rank-and-file pension plans were fully funded, seven were in critical condition and 14 had less than 80 percent of their needed assets, the study showed. By contrast, 23 officer and staff funds from the same unions were much better off, Furchtgott-Roth said.
“Taken together, the funds for officers had 88 percent of their needed funding,” she said. “Six of the funds were fully funded and 20 of the funds had more than 80 percent of their needed assets. None of the funds was in critical condition.”
The Pension Protection Act of 2006 considers pensions with less than 80 percent of assets necessary to cover present and future liabilities “endangered.” Any pension that falls below a 65 percent threshold is listed as “critical.” With that in mind, consider:
The average union pension has resources to cover only 62 percent of what is owed to participants and less than one in every 160 workers is covered by a union pension with the required the assets, according to the Pension Benefit Guarantee Corporation (PBGC).
The “average” union pension is in “critical” condition. That doesn’t bode well for workers, which leads to the question of why any worker would want to join a union with a critically unstable pension plan. More importantly, why are labor bosses’ pensions funded at levels higher than the average union worker? And why would a worker want to tie their future into a retirement plan with so much uncertainty?