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New York Daily News

 

Union Bigs Get the Best Deals: A Sour Labor Day Lesson On Pensions

September 09, 2009

By Diana Furchtgott-Roth

This Labor Day, unions are once again seeking to recruit new members with promises of higher wages and generous pension benefits. These promises are made despite pension funds’ reports to the U.S. Labor Department showing that collectively bargained pension funds are underfunded when compared with other pensions.

In contrast, pension funds for unions’ own staff and officers have been doing just fine.

In 2006, the latest year for which full data are available, only 17% of union-negotiated plans were fully funded, compared with 35% of nonunion plans.

Under the Pension Protection Act of 2006, funds with less than 80% of assets are in “endangered” status. In 2006, 41% of union funds were “endangered,” compared with 14% of nonunion funds.

Thirteen percent of union funds had less than 65% of required assets, also called “critical” status by the Labor Department, while only 1% of nonunion plans were in critical shape.

Unions have separate pension plans for staff and officers of national and local unions because usually officers and staff are employees of the union. These pension plans are doing far better.

A sample of 30 staff pension plans among unions that sponsor the largest 46 rank-and-file plans shows that whereas the multiemployer collectively bargained plans had 70% of the funds needed to satisfy their obligations, the officers’ own plans were 93% funded.

Original Source: http://www.nydailynews.com/opinions/2009/09/07/2009-09-07_union_bigs_get_the_best_deals.html

 

 
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