For years Democrats have been trying to push through a bailout of insolvent union pension funds. They finally found a way to push it through.
Part of the COVID-19 relief bill is a bailout of more than one hundred union pension funds.
Many of these union funds have been managed more like pyramid schemes than like proper pensions. Rather than putting enough money aside for each employee to fund his or her pension, the fund relied on a steady stream of new employees putting money in the fund to pay retirees. That didn’t work out when fewer truck drivers, ironworkers, and warehouse workers joined the unions.
Sen. Chuck Grassley called out the blatant giveaway, especially criticizing its lack of accountability for the funds. The Columbus Dispatch reports:
Rather than realize they promised more than they could pay, the unions began a campaign for a Congressional bailout that culminated in attaching the very unpopular bailout plan to the very popular COVID-19 relief bill. That’s how the sausage is made in Washington. Find a bill everyone loves, and stick on all the things they don’t to get them pushed through.
The legislation would create a special program under which cash payments would be made by the federal Pension Benefit Guarantee Corp. to those funds to ensure that payments to retirees can continue.
The plan keeps the plans solvent for 30 years with no cuts to the benefits of participants and beneficiaries. It also would restore full benefits for retired in plans that have had to take cuts in recent years.
Finally, it requires plans that receive assistance to file regular status reports with the federal government and Congress.
“After years of fighting alongside Ohio retirees, workers and small businesses, we finally have a solution that will not only protect these pensions but will stimulate our local economies and prevent a major bailout that would have cost taxpayers hundreds of billions of dollars if we did nothing,” Brown said.
Sen. Chuck Grassley, R-Iowa, who has worked on separate legislation on multiemployer plans, called the plan an $86 billion bailout with no strings attached.
“So, it’s just a blank check, with no measures to hold mismanaged plans accountable,” he said. “That’s why I spent much of last Congress working on a responsible proposal to rescue and reform the failing multiemployer pension system.”
Action Line: Don’t end up in the same plight as these pension plans. Save until it hurts, because no one is going to give you a bailout.
Originally posted on Your Survival Guy.