Union pensions: The mother of all bailouts

"We spent a fortune to elect Barack Obama -- $60.7 million to be exact -- and we're proud of it."
SEIU President Andy Stern.

I wrote earlier this year that failing pensions would be the major issue of the next decade. It turns out I was wrong by ten years.

No one is perfect.

In today's Washington Examiner, Mark Hemingway warns of the "mother of all bailouts."

Concern over underfunded pensions is the real reason behind nearly every legislative item for which unions are currently agitating. One of the top union priorities is "card check" legislation that would eliminate secret ballots in workplace representation elections, marking a return to the union thuggery of yesteryear. Without secret ballots, unions could identify and bully workers who don't support recognizing the union.

But unions don't want card check just so they can organize more workplaces and collect more dues -- that's chump change. They want to organize more workplaces so they can then use mandatory binding arbitration to force more businesses into multiemployer pension plans.

Under "last man standing" accounting rules, if you have five companies in a multiemployer pension plan and four of them go bankrupt, the last company standing has to pay for the pension plans of all five companies.

Multiemployer pension liabilities kill companies. Even if your business is fiscally sound, the liability of other companies you're linked with can severely damage your ability to get a loan or raise capital.

EFCA zealots SEIU has a workers' pension fund that's not as bad as some, but a few years ago it was near the "endangered level," 82 percent--but that was before the economic downturn that took the stock market with it. Meanwhile SEIU's bosses, no dummies, have their own plan, which was measured at 123 percent-funded at the time.

It's good to be king.

But SEIU and other unions will want serfs such as you and I to bail them out.

And I don't feel that I should have to. President Obama, the best pal of unions since FDR, will probably disagree with me.

Related posts:

Unions look to PLAs to bail out their failing pensions
Report from the bloggers' conference call on EFCA and under-funded pensions
Multi-employer pension blues

Technorati tags: labor politics unions news organized labor card check efca pensions SEIU