P&I Multiemployer Editorial Responses

In their May 28, 2018 issue Pensions & Investment (P&I) editorialized against a bailout of multiemployer plans but wound up suggesting just that. To add to the confusion in their June 25, 2018 issue there were two Letters to the Editor (copied at the bottom of this blog) from:

  1. Teamsters president James P. Hoffa calling the P&I editorial “simplistic and poorly reasoned”, and
  2. Russell Kamp and Ronald J. Ryan supporting the Butch Lewis Act.

I had a similar skeptical response to the P&I editorial to what Hoffa started out with but then he lost me:

  • Investors would buy anything if it were guaranteed by the federal government and with these ‘special pension bonds’ having no reliable source of repayment wouldn’t that say much more about the federal backstop than the quality of the investment?
  • Central States corruption before 1978 may be ancient history but check out the Schedule C filings and witness the legalized pension raids going on since (which this bailout bill is designed to perpetuate).
  • ERISA may not apply to public plans but if a bailout ‘works’ for multiemployer plans (by ‘works’ I mean putting off complete default until the politicians voting for the bailout are long gone from office) it will be used for public plans.
  • Yes, as many as 3.5 million American workers and retirees may lose some of their pensions without a bailout but where were those people when their pensions were being surreptitiously stolen by the denier/defender syndicate that essentially sanctioned underfundings for their own benefit?

As for Kamp and Ryan, they fully supported the loan scheme claiming:

Our team’s analysis of the 114 [critical and declining] plans does not forecast any plan failures! In fact, the annual projected return on asset assumption, or ROA, to ensure solvency is only 6.5% for each of these plans.

…..

Why are we supporting so vigorously the Butch Lewis Act? Primarily because we are fearful that hardworking participants in failing multiemployer plans will not receive the benefits that they earned for years of dedicated service.

And maybe secondarily that consulting firms brought in by the PBGC to ‘help’ will not receive the fees that they will earn for reassuring everyone that a bailout works. And how do you do a study with an unlimited input (taxpayer-backed loan money) and not be able to forecast success? The ROA could be 1% and there would be no plan failures if loan amounts were large enough.

 

8 responses to this post.

  1. Absolute madness.
    I used to say that common sense dictates that you stop throwing good money after bad.
    Now, I say that it’s uncommon sense. Very, very uncommon sense.

    Reply

  2. Posted by Tough Love on June 27, 2018 at 11:18 am

    Wonderful !!!!!!!!!!!!!!!!!

    Supreme Court deals major blow to public sector unions

    https://www.cnn.com/2018/06/27/politics/supreme-court-union-fees-decision/index.html
    ———————————————

    Public Sector Unions are a CANCER inflicted upon civilized society.

    Reply

    • Posted by Tough Love on June 27, 2018 at 11:20 am

      Here’s the Supreme Court’s actual (full) decision:

      https://www.cnn.com/2018/06/27/politics/read-janus-afscme-scotus/index.html

      Reply

      • Posted by El gaupo on June 27, 2018 at 11:54 am

        This will hurt the CWA. Maybe not the NJEA so much, I don’t know, they are fairly strong. The PBA dues are relatively cheap compared to the Njea and there is much closer brotherhood between police than teachers.
        Time will tell how many employees drop out of there dues. I don’t think you will see very many cops do it. We have always been able to not be a pba member and just pay the representation fee. However in my 23 years on, I know of one guy who retired in 1995 that was not a pba member within my dept. I think the strong unions will still hold much clout in N.J. luckily for me I have at most one more contract to negotiate after this one. Most cops realize if it wasn’t for the pba they would be making half as much as they do now, w few benifits left. If they wanna weaken the union, so be it. I’ll be retired.
        My opinion is they should not be covered by the contract if in fact they do pay money covering the cost of attorneys,etc to litigate this stuff. But again, the fact that you complain all the time about these unions(technically associations, we are not allowed to be a union per se) should show their members that they have had a lot of success over they years and securing higher wages and benifits than they ever would have without the representation.
        I make double what our full time Dpw guys make, I wonder why?? Oh yeah no collective bargaining rights.

        Reply

        • Posted by El gaupo on June 27, 2018 at 11:58 am

          Should be * if they do NOT pay money for collective bargaining representation. Lol. Either way. I’m fine w it. I will really be looking forward to the day when I will be a retired officer. Can’t come fast enough. Goodbye tension, hello pension.

          Reply

        • Posted by Stephen Douglas on June 27, 2018 at 12:37 pm

          “My opinion is they should not be covered by the contract if in fact they do (NOT) pay money covering the cost of attorneys,etc to litigate this stuff.”

          Seems to be a misconception by some commenters, in CA at least. As in. “Who needs the union? I would rather negotiate my own pay and work conditions anyway.”

          That’s not the way it works. If there are 1500 Maintenance Worker II in California, and only 1,000 in the union, the 500 non union workers will get the same pay, benefits, and work rules as everyone else. The only difference __may__ be that the union will not be obligated to represent those employees in individual disputes with management.

          Reply

          • Posted by dentss dunnigan ... on June 27, 2018 at 1:55 pm

            Unions promote laziness why should I work harder if I only get the same pay as the other guy who’s not as good If you’re a good worker you’ll get the raises if they don’t want to lose you plus it’s instant raise ..https://www.nj.com/opinion/index.ssf/2017/10/nj_teachers_are_getting_ripped_off_by_their_own_ly.html

          • It was derided as “99 ways to spike the pension”.

            CalPERS made it clear that these incentives were __optional__ pension enhancers. It is up to the local government as to whether each was pensionable.

            Some might question the value of these incentives, but many were just copies of similar incentives in the private sector, such as bilingual pay, shift differential, special licenses _not_ required by the position, etc.

            All union members are not the same. If you take on the responsibility to be a notary public, you will likely earn a little more pay than “the other guy”. If you’re a good worker you’re much more likely to get that promotion.

            Since federal license requirements were changed in 1999, I obtained a commercial driver license. It was not a “requirement” for the job, but beneficial for management to have some of us capable to drive the larger trucks. It was also a pet peeve of my supervisor, who tried twice but failed the exam. For me, it was a five percent wage increase.

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