Pensions

Taxpayers foot the bill for underfunded pensions | Letters to the Editor

I’m not opposed to private-sector unions, but I have a big issue with those in the public sector because of the inherent conflicts; even Franklin D. Roosevelt was opposed to them. Still, it grates on me when people argue that unions are like hotdogs and apple pie: just awesome in every possible way.

Let’s take the recent letter writer who argued that the United Brotherhood of Carpenters was paying him a pension “that is not on the taxpayer’s dime.” Well, maybe not yet, but it probably soon will be. See, it’s terribly underfunded, much like Social Security and just about every other defined-benefit plan in existence today. Those things generally work when the number of people contributing to them outnumber those receiving benefits. But with life expectancy way up over the years, and fewer contributors, most pensions are severely underfunded.

Social Security, by the way, is some $11 trillion — trillion — shy of having sufficient assets to pay beneficiaries.

The Carpenters Pension Fund of Philadelphia is only 66 percent funded. That means it has 34 percent less in assets than would be needed to fully fund all benefits promised its beneficiaries. And guess what? The union has fewer members than it did in its heyday. That might be OK for those who retired 10 or maybe 15 years ago, whose life expectancy might not outlast the pension’s. But if you’re a union carpenter today and expect to get a pension when you retire, say, in 10 years, there might not be anything there.

Who then picks up the tab? The Pension Benefit Guaranty Corp., a federal agency. In other words, tax dollars.

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