Let's Bailout Union Pension Funds

[guido911]

Why not? We are bailing everything else out.

http://www.foxbusiness.com/personal-finance/2010/05/24/lawmaker-introduces-b-union-pension-bailout/

[Conan71]

Sweet,

"Although right now taxpayers could possibly be on the hook for $165 billion, the liability could essentially be unlimited because these pensions have to be paid out until the workers die."

Let's just raid Social Security to cover this...oh wait, that's already been done to pay for other things the government had no business doing.

[waterboy]

Makes one wonder if we shouldn't just pull a re-organization bankruptcy. Seriously some cities have done it before. And some states are contemplating bankruptcy, why not the whole freakin' country? All debts forgiven, everyone gets $2000 in gold coin, an acre of land with mineral rights, a tractor and a 4wd Suburban.

I give it 5 years and we'd have to do it all over again.

[Conan71]

Makes one wonder if we shouldn't just pull a re-organization bankruptcy. Seriously some cities have done it before. And some states are contemplating bankruptcy, why not the whole freakin' country? All debts forgiven, everyone gets $2000 in gold coin, an acre of land with mineral rights, a tractor and a 4wd Suburban.

I give it 5 years and we'd have to do it all over again.

Hell, that's better than winning a couple of nights on Jeopardy

[Red Arrow]

Wait a minute, give me a chance to run up some serious debt to be forgiven.

[we vs us]

Wait a minute, give me a chance to run up some serious debt to be forgiven.

But that's not what happened.  At least not for the most part.  What happened is that pension funds the world over (not just in the US) invested in many of the CDSs that the financial companies were hawking, but that were filled with so much crap real estate paper. They were triple A rated and the salesguys told the fund managers they were the safest and best bets out there.  Great places to park your principal. 

Of course the real estate market promptly tanks and voila, so do CDSs and so do the pension funds.  The pension funds were always going to be one of the next boots to drop . . . and it's smart that someone's starting to talk about how to fix them. 

Also:  bailout bailout bailout boogety boogety boo!  It's like you can say the word "bailout" and we all have to scream out "hell no!" regardless of whether it might be worthwhile to save either an institution.  At this point it's mindless call and response.  Let's talk, instead, about what we're rescuing and why, and who's to blame.

[TeeDub]

It is cheaper to payoff a politician than it is to make the proper payments into your pension fund.

"Eight of the largest unions have underfunded plans, according to the most recent 5500 reports, including the Service Employees International Union (SEIU), the United Food and Commercial Workers (UFCW), the International Brotherhood of Electrical Workers, the Laborers International Union of Northern America, the International Association of Machinists, the United Brotherhood of Carpenters, the International Union of Operating Engineers, and the National Plumbers Union."

http://www.washingtonexaminer.com/opinion/blogs/beltway-confidential/Almost-half-of-top-unions-have-underfunded-pension-plans--47162127.html


The SEIU took out loans to fund $85 million in contributions during the campaign season last year.

http://online.wsj.com/article/SB124243785248026055.html

[JeffM]

Also:  bailout bailout bailout boogety boogety boo!  It's like you can say the word "bailout" and we all have to scream out "hell no!" regardless of whether it might be worthwhile to save either an institution.  At this point it's mindless call and response.  Let's talk, instead, about what we're rescuing and why, and who's to blame.

bailout = bad
labor unions = bad
labor union bailout = double bad
Obama labor union bailout = double bad times infinity

/sarcasm

[Conan71]

Also:  bailout bailout bailout boogety boogety boo!  It's like you can say the word "bailout" and we all have to scream out "hell no!" regardless of whether it might be worthwhile to save either an institution.  At this point it's mindless call and response.  Let's talk, instead, about what we're rescuing and why, and who's to blame.

Well, if it makes you feel better, that's fine, don't call it a bailout.  This seems to be a new defensive DNC talking point.

The term "bailout" was applied to the original $700 bln Bush plan and has been used ever since quite commonly in the media and every day conversation.  It's hardly a moniker created to poke fun at President Obama's policies.  Here's a Google search of about 3.6 million hits for "Bush, bailout"

http://www.google.com/search?sourceid=navclient&ie=UTF-8&rlz=1T4TSHB_enUS269US269&q=bush%2c+bailout

I'll quit calling it "bailout" and will from here on refer to it as "emergency spending".

[cynical]

There are a few technical points to keep in mind. 

1.  The money funding these traditional defined benefit pension plans is paid by employers. The plans are ordinarily jointly administered by trustees appointed by the employer(s) and the union.  Those trustees have the same legal responsibilities that all trustees have as fiduciaries. 

2.  Whenever a defined benefit pension plan becomes underfunded for any reason, the trustees are legally required to implement a rehabilitation plan.  Such rehabilitation plans usually involve a combination of reduced benefits and higher contributions. 

3.  Aside from investment losses, a plan's funding issues become more pronounced when employers are making lower contributions, either because of large numbers of layoffs or substantial wage and benefit concessions.  A good many of the plans mentioned in the articles have seen reduced contributions AND investment losses. They are in the same boat as the banks and insurance companies that have experienced similar losses.

[guido911]

bailout = bad
labor unions = bad
labor union bailout = double bad
Obama labor union bailout = double bad times infinity

/sarcasm stupidity

That's more like it.

[we vs us]

Well, if it makes you feel better, that's fine, don't call it a bailout.  This seems to be a new defensive DNC talking point.

The term "bailout" was applied to the original $700 bln Bush plan and has been used ever since quite commonly in the media and every day conversation.  It's hardly a moniker created to poke fun at President Obama's policies.  Here's a Google search of about 3.6 million hits for "Bush, bailout"

http://www.google.com/search?sourceid=navclient&ie=UTF-8&rlz=1T4TSHB_enUS269US269&q=bush%2c+bailout

I'll quit calling it "bailout" and will from here on refer to it as "emergency spending".

The problem with "bailout" is that it's an RNC talking point, too.  It's completely politicized at this point, and so means virtually nothing. 

The question comes down to this:  should we NOT bail out pension funds?  These are funds from people who were trying to do the right thing, ie save for retirement and got caught in a once-a-generation recession. Should their savings be wiped out completely?  Should we, essentially, allow a whole raft of middle class folks to retire into poverty?  When you use the word "bailout" that's what I came away with.  That supporting these retirement funds might be a useless way to spend federal dollars.

[guido911]

The problem with "bailout" is that it's an RNC talking point, too.  It's completely politicized at this point, and so means virtually nothing. 

The question comes down to this:  should we NOT bail out pension funds?  These are funds from people who were trying to do the right thing, ie save for retirement and got caught in a once-a-generation recession. Should their savings be wiped out completely?  Should we, essentially, allow a whole raft of middle class folks to retire into poverty?  When you use the word "bailout" that's what I came away with.  That supporting these retirement funds might be a useless way to spend federal dollars.

I lost 40% of my investment value during the "recession", anyone going to bail me out?

[Conan71]

The problem with "bailout" is that it's an RNC talking point, too.  It's completely politicized at this point, and so means virtually nothing. 

The question comes down to this:  should we NOT bail out pension funds?  These are funds from people who were trying to do the right thing, ie save for retirement and got caught in a once-a-generation recession. Should their savings be wiped out completely?  Should we, essentially, allow a whole raft of middle class folks to retire into poverty?  When you use the word "bailout" that's what I came away with.  That supporting these retirement funds might be a useless way to spend federal dollars.

I get your point, but I want to know who is going to make me whole for losses in my IRA which my company participates in matching with.  I'm trying to figure out where we need to draw the line on which people we make whole and which we don't.  I'm not a wealthy independent investor who rode the market all the way down at a profit.  It's a key part of my retirement funding which I'd like to be there when it's that time.  I've been told flat-out for the last 15 years: "Don't count on Social Security to be there when you are ready to retire."  Yet I must contribute every single week to a retirement program which supposedly won't be there when I retire.  I'm simply curious why does one middle class group deserve more consideration than another?

[Conan71]

I lost 40% of my investment value during the "recession", anyone going to bail me out?

Nah, you are too much of a freeping troll