Tuesday, November 29, 2005

A Guest Post about Pensions & Unions

We at TBWA are proud to present our first-ever guest poster. Please give a BWA welcome to Chris, a final-year law student in Chicago.

She’s liberal, she’s pro-union, and she’s gonna be a lawyer… you can already hear conservatives quaking in their tasseled-shoes can't ya?

Read her post, comment on her post, and vote in our poll… it’s a moral imperative.

And now… here’s the post:


Someday the pension you save may be your own.

Bush and his cronies may view with suspicion, or outright contempt: Democrats, liberals of all colors, Europe, women, minorities, the poor, the middle-class, lawyers, judges, grammarians, the United States Congress, and the parts of the Constitution that aren't the Second Amendment… but what do they hate most of all?

UNIONS

Unionized workers are a close second. So what are the Republicans in Congress going to do about it?

Crush them slowly (or quickly if no one pays attention)

You ask yourself, what have these insidious unions done now? They negotiated fair pension deals for decades. (The nerve)

Well, the Republicans aren't going to stand for this sort of chicanery. Read on:

The Senate passed a new pension bill (S. 1783) on Thursday, November 16.

The House is scheduled to take up its pension bill (H.R. 2830) on December 7th or 8th.

If the House passes its bill, there will then have to be a House-Senate conference to iron out differences between the two pension bills. The House pension bill (H.R. 2830) has two major problems:

It would freeze pension credits and benefits in many pension plans negotiated by unions.
Second, it would outlaw plant shutdown pension benefits that have been negotiated by unions.

If pension credits were frozen, this would mean that nobody could earn any more credited service, no matter how much longer they worked.

For example, a worker with 15, 20 or 29 years of service would be frozen at those levels. They would not earn any more pension credits for future years of work, it would also mean their pensions would not grow as they continue to work. It also indicates they might never become eligible for certain types of pension benefits; I.E. they would never qualify for a 30-and-out pension.

If pension benefits are frozen, this would mean that benefit levels could never be improved. Thus, the benefit levels for active workers could never be adjusted to keep pace with the growth in wages. And benefit levels for retirees could never be adjusted to reflect inflation.

The sponsors of the House pension bill claim these limits on pension credits and benefits only apply to poorly funded pension plans. Is this true?

No.

Because of a phony “credit balance” subtraction requirement, the House pension bill would also limit pension credits and benefits in plans that are well funded, including the GM, Ford and DaimlerChrysler pension plans…

Okay, okay. I'll stop there. The main point is this: they want to freeze the pension plans. Under ERISA (the Federal law that governs pension plans like this) ceasing a pension plan will be much easier if it's frozen for a time. Why should you care if you work/don't work for an auto company, or you're not a member of a union? Why care if you don't have a pension plan at all?
First off, because you have a heart and you don't want to see people who've been working hard, dangerous, demanding jobs thrown to the wolves. Not that altruistic? How about the economic repercussions in your community of hundreds of thousands of people who suddenly find themselves with inadequate income and health insurance?

The proponents will tell you this is just a "technical rule" designed to improve the system.

(I'm only a student, but I can tell you this: The bulk of the law is "technical rules". Corporate tax rates go down? That's just a "technical rule" change that involves changing two numbers in a huge law. Letting the FBI access your computer files? Change the "probable cause" to "discretion" and it's done. Constitutional protections like the 4th Amendment are often referred to as "technicalities" when they prevent people from being railroaded.)

Tell your Congressman that you would prefer they not "fix" the problem of workers having fair pensions that they bargained for in good faith, then worked to earn.

Well, if these bills pass, it'll be a good thing the White House hasn't done something crazy like try to privatize Social Sec—….oh, wait...

Well, it's at least a good thing they've made sure everyone has good health ins—…. Hmm...

Okay, okay…at least they haven't cut back on aid to senior cit—…

Wait, I've got it. At least the next generation will be in good shape because of good school fund—… crud

- written by Chris

3 comments:

Anonymous said...

My father worked for 30 years as a union tradesman...and his union funds their own pension. Hence, there's no worry about whether the company goes under.

Why do not the UAW et al fund their own damn pensions? The mere fact that unions have continued to force companies to fund pension even in the face of clear evidence of American un-competitiveness on the global market (and the inevitable loss of revenue and market share that would keep the pensions funded) smacks of negligence at the least, and fiduciary malfeasance at the worst, in the ranks of union leadership. Of course, the author would have us also believe that union bosses are all golden angels whose sole concern is for the working man, and that they are not guilty of any number of misdemeanors or felonies in the handling of their unions' finances, but the she probably also believes in fairies at the bottom of the garden and that Washington and Detroit have suppressed the "magic wand" of energy independence too. But I digress.

Unions all should long ago have abandoned company-funded pensions in favor of self-funded pensions when it became clear that American companies could no longer compete (for the dozens of reasons we'll leave for another discussion). I see this as a "reap-what-you-sow" outcome, and unions have at the very least partially contributed to the increasing number of massive corporate bankruptcies we've seen in the past year. You can only milk a company for so much, and when a company has the option of taking your job to somewhere far less expensive, you. as a union member or leader, really has to consider what's best in the long run: keep a job with fewer benefits, or join the rest of your colleagues in the unemployment queue.

Union leadership has failed their membership. I have no pity for those who got the leadership they deserved.

Anonymous said...

(continuing)

Having said that, I'd agree that Congress should leave their hands off it (don't they have steroids in MLB to worry about, and didn't Arlen Specter just take up the cause of Terrell Owens in the name of NFL anti-trust violations? I'm so glad we don't have term limits in Congress, aren't you?), and I do agree that the contract is the contract, and if the CORPORATE stewardship was dumb enough to agree to something they knew would kill them in the long run, then *shrug* I guess your business is no longer viable...but don't expect the American citizen to bail you out.

Fat corporate pension funds have been a problem for a long time, and underfunded pensions should never have been allowed...but then, those that wrote the laws that allow pension funds to be underfunded, also themselves cannot keep their hands out of the biggest cookie jar in the country: Social Security. So, it should come as no surprise that lawmakers see it is reasonable to put "IOU's" in pension funds when it's a matter of course in their daily course of business.

In the end, this sort of activity comes down to us, the American citizen, who have allowed this to go on far too long. The credit-consumer public is as guilty as anyone for underfunded pension plans: have it now, pay for it later, and someone else is left holding the bag. Of course, politically, that sort of truth gets you vilified, not elected, so I guess the beat goes on. We'll continue to see self-righteous posts like this about man's inhumanity to man, and nothing will change. Too bad. I guess. What's on "Survivor" this week?

Chris said...

The Union pension funds you're talking about are called Multi-Employer Plans (MEPs) and are a different program for different employees. These union-funded plans exist because many tradesmen work for different companies, with placement provided through their unions.

The plans referenced in the post aren't "union" plans. They're pension plans for, say, Ford employees who've worked for Ford for 30 years. Just because they're negotiated by unions doesn't mean that the union is the employer.

Just a clarification.
-Chris