Glenn Foden / November 28, 2014
From Rachel Greszler’s piece published Nov. 24:
If you’re a worker and you have a pension, there’s a government agency that will pay that pension if your company is unable to fulfill the financial promises made to you and your colleagues.
There’s just one catch: That government agency has a massive deficit right now.
According to the recently released 2014 annual report from the Pension Benefit Guarantee Corporation, the deficit in PBGC’s multiemployer program increased from $8.6 billion in 2013 to $42.4 billion in 2014.
This massive deficit is problematic for the millions of workers who stand to receive mere pennies on the dollar in promised pension benefits.
It’s also a problem for taxpayers, who could be charged with bailing out private-sector pensions that were never intended to be public liabilities.
Although the impending insolvency of certain large multiemployer (or union) pension plans has been known to PBGC for quite some time, it was not until 2014 that those plans’ expected insolvency was recorded in PBGC’s budget. As the PBGC report noted, the expected insolvency within 10 years of two very large plans added $26.3 billion to expected liabilities in PBGC’s multiemployer program, and the expected insolvency of another 14 plans added another $9.0 billion to liabilities.
Although not specifically cited in the report, the two large plans are elsewhere identified as the Central States Teamsters and United Mineworkers. According to testimony from the Government Accountability Office, the insolvency of one of these very large pension funds would quickly bankrupt PBGC’s multiemployer program, leaving many PBGC beneficiaries with mere pennies on the dollar in promised benefits.
Read the rest here.
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