Tuesday, June 1, 2010

Bailout of Union Pension Funds in Process in Both House & Senate

The $165 billion bailout of the union pension funds is progressing well in both the House and the Senate. Union mismanagement and excessive benefits have depleted these funds along with the economic downturn that has depleted most taxpayers retirement savings. Now those "redistributionists" want to tax you to pay these union pensions, pensions that are, for the most part, higher than those in the non-union sector. Just another payoff to the Democrat voter base.

The bill, the Create Jobs and Save Benefits Act, establishes a new fund that would finance the struggling liabilities of multi-employer pension funds with taxpayer dollars. Those liabilities primarily come from “orphans”—employers that are part of a union pension plan but have since closed or gone bankrupt, leaving no new employees to pay in, but a number of retirees still in need of benefits.

The Casey bill would “partition” ailing pension plans, leaving the solvent part to continue running as usual, and placing the “orphans” into a so-called “Fifth Fund.” That fund would be part of the Pension Benefit Guaranty Corporation (PBGC), which has four other backstop funds that use only private money gleaned from participating companies.

Subsection (d) of the Casey bill describes the creation of the additional fund and specifically designates the obligations contained in it as new “obligations of the United States.”

Vernuccio said the plans needed the taxpayer dollars because union officers typically are guilty of “overpromising” on what benefits they can deliver their rank-and-file members, and that the bill contains nothing to keep the mismanagement from happening in the future.

“They’re overpromising, right,” Vernuccio said. “In fact, actually the bill eases the requirements that they reform. So, they’ll be able to use accounting data like actuarial tables to fund these things less (in the future), and also what the bill does is it…leaves (the plans) under the control of basically the guys that brought these plans into the ground with their overpromising.” Read entire article here.

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