Union officers’ pension plans are significantly better funded than the plans they negotiate for their rank-and-file counterparts, raising questions about whether union members have been manipulated by those they trust to bargain for them.
The average union staff plan is funded at over 95 percent, while the average funding percentage of a rank-and-file member’s pension plan is 79 percent, according to a September study by the Hudson Institute. None of the staff pensions is on the Department of Labor’s list of critically underfunded pension plans, while more than half of rank-and-file pension plans are endangered. (A pension is considered “endangered” by the government when it contains less than 80 percent of the assets needed to cover its liabilities.)
Some are questioning why pension plans negotiated by union leaders on behalf of union members are performing so poorly while the leaders’ pension funds remain healthy.
“Unions are pay and benefits experts — they know this stuff six ways to Sunday, it’s their raison d’etre,” said Brett McMahon, the Vice President of Miller and Long Construction and a member of the national trade association Associated Builders and Contractors. ”It’s not as if they can claim some kind of ignorance about this, that by chance or happenstance these are funded better than those. They know exactly what they’re doing.”
Because union officers are usually employees of the union itself and not of any private business, they have their own pensions with rules that are separate from those of their members’ plans.
The higher pension contributions to the staff plans come straight from the dues paid by union members, the Hudson Institute found. In fact, the main reason union leaders are so eager for new recruits, according to the study, was to bankroll the failing collectively bargained pension plans.
During Passover dinner, I was surrounded by a table full of lifelong union guys. I don’t understand how anyone who worked in an industry where you’re regularly unemployed for months at a time can stay a union guy, but nonetheless these guys were.
At some point, the discussion turned to the union two of the people I was supping with were members of and they regaled the table with stories of how the union was run from the top down with people that were looking out for themselves and their families and their cronies. I must’ve been the only one at the table that wasn’t shocked (or the only one dumb enough to say something at a family function) because I said, “And this surprises you?”
I got the look of “Huh?”
I continued, “The union exists for the purpose of keeping the union going. It has nothing to do with workers, which is why you’ll go months without working and they’ll collect a salary the whole time.”
“You don’t know what you’re talking about,” he snapped back at me because, as you know, if you attack the union you’re a bad person who’s in the pockets of corporations.
“I don’t? You don’t think it’s odd that pension plans are collapsing yet union bosses are making 10x what you are? Stop it.”
Finally, the person sitting next to me chimed in. “He’s right.” I almost fell off my chair. “I don’t know if they don’t care at all about workers, but they’re definitely more interested in the union than the people working in it.” In other words, they’re more interested in the organization itself.
Either way, this article seems to buttress my argument pretty nicely and brings up many complaints I’ve had about unions all of my life.
Thanks to Kim Priestap for pointing out this awesome article.