10.30.2018 0

Better to deal with underfunded multiemployer pensions now rather than later

By ALG Staff

Multi-employer pension plans, negotiated by large scale unions, have promised employees retirement benefits that are significantly underfunded by more than $36 billion, leaving a hole in funds that are meant to go to hardworking American when they retire.

Last week on the Conservative Commandos Radio Show, Americans for Limited Government President Rick Manning sat down with President of the Frontiers of Freedom Institute George Landrith to discuss the coming crisis.

“The pressure is going to be tremendous, and there will simply not be enough conservatives to say no to that, many conservatives will not have the political courage to say no in light of the kind of catastrophic stories,” Landrith said.

“So, basically, I think we have to stop that, you never let a good crisis go to waste, by heading off the crisis at the pass,” Landrith added.

To avoid this high cost later, Manning has suggested a plan to prevent excessive costs to taxpayers. Manning’s plan requires both unions and corporations to contribute equal parts to any risk pool that may be created in the event of a default, this discourages groups from entering into these risky deals in the future.

Manning has also demanded full transparency, including annual external audits, for all companies and unions which enter into these deals to ensure these errors do not occur again.

Manning also demands that unions not receive 100 percent payouts when their pension system falls — private sector groups receive a max payout of 50 percent and unions should receive no more.

Overall Manning and Landrith discussed the importance of moving away from these defined benefit plans that have failed and encouraging unions to renegotiate for more practical benefit plans.

Congress will soon be addressing the issue. On Nov. 30, the Joint Select Committee on Solvency of Multiemployer Plans will provide Congress with recommendations on how to handle this pension crisis, in order to mitigate the cost to taxpayers they should look to Manning’s plan. As Landrith noted, unless this problem is brought under control now, it will cost the taxpayer hundreds of billions down the line when pressure mounts to simply bail these pension plans out.

Defined benefit pension plans were never a smart investment and we all should have seen this problem coming. American taxpayers should not bear the brunt of this cost because of union irresponsibility. To hear more on Manning and Landrith’s recommendations watch the Conservative Commandos Radio Show.

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