"Private pensions the next bailout?"

[WhiskeyGirl]

For the first time, taxpayers may become responsible for the nongovernmental pension liabilities of union collective bargaining contracts in construction, trucking and other industries in which workers move from one employer to another. Some estimate that these multiemployer pensions are $165 billion short of committed obligations for paying retirees’ defined benefits.

Sen. Bob Casey, D-Pa., contends that his Create Jobs and Save Benefits Act of 2010 costs no more than $10 billion. Critics say the bill is the nose under the tent, potentially exposing taxpayers to the full $165 billion shortfall, and whatever additional future debts can’t be paid by underfunded private plans. Casey’s bill would establish a “partitioned” fund within the PBGC devoted to deficit-ridden multi­-­employer plans.

“The proposal would transfer responsibility to the PBGC for paying of the full plan benefits of participants transferred to the partitioned plan, which in many cases would be well above the amount guaranteed by the PBGC under current law,” testified Phyllis C. Borzi, assistant secretary of labor.

Transferring these private, union-negotiated obligations to taxpayers is unwarranted. As with previous federal bailouts, it’s also ripe with the seeds of dire, unintended consequences. We fear that particularly after November’s balloting, a lame-duck Democratic-controlled Congress and a president prone to federal intervention may unwisely approve such a measure to pay back labor unions, which donate tens of millions to their political campaigns.

We urge Congress to kill this bailout. The sooner the better.

http://www.oaoa.com/opinion/bailout-52002-pensions-point.html

Why isn't anyone following the money to find out where it went?  Who made all the empty promises?

Did taxpayers bailout the clients of Bernie Madoff?

Sorry, no 401K / IRA for you!!!

[WhiskeyGirl]

Public Sector Pensions: The Real Bailout Bomb is Still Midflight
by Kyle Olson

Will the madness ever stop?  Just over two weeks ago, Congress passed a $10 billion “Education Jobs Fund” that gave money to cash-strapped states to keep teachers and other school employees on the job.  It was spun as a victory for the kids, but the real winners were the teacher unions who were spared from making any concessions on pay and benefits that are necessary to balancing school budgets.

Once that $10 billion is spent, the structural problems of school spending will still remain.  A recent study from the Manhattan Institute and the Foundation for Educational Choice finds that “teacher pension liabilities for all 50 states now total almost $1 trillion….almost triple the cost of what state officials have on their balance sheets.”  The study concludes that these unfunded public burdens “could bankrupt state budgets including education programs.”

http://biggovernment.com/kolson/2010/08/26/the-real-bailout-bomb-is-still-midflight/

I'm still waiting for my billion dollar bailout/stimulus/recovery check.  Hasn't come in the mail yet!!!

[WhiskeyGirl]

The bill would create a special fund in the Pension Benefit Guarantee Corporation  (PBGC.) PBGC uses private premiums paid by pensions to insure retirees are paid if a plan sponsor becomes insolvent. If passed, the bill would use tax payer dollars to shore up some underfunded union pension plans. The use of public funds to insure private pension plans is a first for PBGC which has not used public moneys in the past.

Last October the Washington Times was the first to identify bailout language in similar legislation, introduced in the House sponsored by Rep. Earl Pomeroy (D-ND).

The draft would allow union-controlled multiemployer pension plans to form alliances with one another. It also would create something known as a fifth fund that the Pension Benefit Guarantee Corp., with taxpayer help, would use to prop up failing union pension plans…..

Mr. Pomeroy proposes putting the taxpayer on the hook now. In a stark departure from the traditional role of PBGC, the draft bill states that "obligations of the corporation that are financed by the [fifth fund] shall be obligations of the United States." For the first time, PBGC liabilities will be borne by taxpayers. The fifth fund could make available billions of dollars to prop up union pensions.

Read more at the Washington Examiner: http://www.washingtonexaminer.com/opinion/blogs/Examiner-Opinion-Zone/Another-day-another-union-bailout-100771324.html#ixzz0xr6cOPrY

[WhiskeyGirl]

Flanked by representatives from the International Brotherhood of Teamsters, YRC Transportation and ABF Freight Systems, Sen. Bob Casey, Pennsylvania Democrat, proposed a massive bailout for the Teamsters' and other union pension funds on March 22. The deceptively named Create Jobs and Save Benefits Act of 2010 (the Save Adorable Fluffy Bunnies Act was taken, apparently) should really be called the Bail Out Irresponsible Unions Act. That is exactly what the bill would do.

After denying for years that their pension funds were in trouble, labor unions of late have been forced to admit that union-managed multi-employer pension funds are in wretched shape. Moody's Investor Services estimated multi-employer pensions were underfunded by $165 billion in 2009. Because of labor mismanagement, millions of current and former workers' retirements are in real danger. Labor is doing everything it can to buy time and shift the blame elsewhere.

To start, it would reward unions for past bad behavior by leaving them in charge. When a PBGC has to fund an insolvent plan, it controls the benefits and payments. The segregated plans in the fifth fund - known as a partition - would be controlled by the same trustees who failed to adequately fund the original plan. According to Mr. Casey's own office, "PBGC [would] not provide notices, calculate benefits or in any other form administer the plan."

Retirees in partitioned plans would receive their full benefits courtesy of the U.S. taxpayer. The bill states that obligations of this "fifth" fund would be "obligations of the United States" - and no longer just by PBGC insurance premiums. Taxpayers could be on the hook for even more, too. A provision in both bills would allow the fifth fund to transfer money to other parts of PBGC. That means that the fifth fund could be the camel's nose under the tent, using taxpayer dollars to shore up the deficit-ridden PBGC. According to the corporation's own report released earlier this month, it had a deficit of almost $22 billion in September 2009. By 2019, the shortfall is expected to balloon to $34 billion.

http://www.washingtontimes.com/news/2010/may/25/look-for-the-union-fable/

Let me guess, there is no citizenship check and US taxpayers will be bailing out and funding union pension benefits for foreigners too...

jmho