Dear Editor:
U.S. Sen. Claire McCaskill recently sent out an email concerning the mismanaged Central States Pension Fund. It is a union-run multiemployer pension fund that covers over 400,000 truck drivers and warehouse workers who work at 1,500 companies.
Central States currently has $16.8 billion in assets and $35 billion in liabilities. People have been aware of the problem for years.
In 2006 Congress set up the Pension Benefit Guaranty Corporation (PBGC). Pension funds in the PBGC pay premiums (taxes) so that it can bail out the mismanaged funds. Because there are so many pension plans that have become underfunded the PBGC will go broke if it doesn't raise premiums, or get a taxpayer-funded bailout.
The PBGC single employer program covers over 30 million workers and retirees in over 22,000 plans. A separate multiemployer union plan covers over 10 million workers and retirees in about 1,400 multiemployer plans.
There are many multiemployer union pension plans that have promised more than they can deliver. At least 100 of them will go bankrupt within 20 years unless they make changes. Some, including Central States, must make drastic changes.
Benefits paid by the PBGC are typically much less than those paid by the union multiemployer plans. In 2014 Congress passed a bill that allowed plans within 15-20 years of insolvency, to reduce their benefits to as little as 110 percent of PBGC benefits, in an effort to stave off bankruptcy. Central States submitted a plan to Congress but it was rejected because even at the proposed reduced benefits Central States could not remain solvent.
Sen. McCaskill appears to think that since the union has mismanaged the Central States Plan to the point where it will be bankrupt in less than 15 years, if it continues paying full benefits, we taxpayers should step in and bail out the plan. If she has an alternate solution it was not apparent in the email.
Is the monitoring of pension plans just another example of the ineptitude of the federal government? The IRS attacks groups that promote smaller government, the VA falsifies waiting lists so that managers can get larger bonuses, the TSA fails to catch 95 percent of attempts by DHS agents to take banned agents onto airplanes and the list goes on and on.