Monday, April 12, 2010

SEIU invested tens of millions on Obama and DemCare in order to replenish its woefully underfunded pensions -- on your dime

The SEIU spent $85 million on Barack Obama's campaign and millions more on pushing for DemCare. Among its biggest rewards will be millions of medical civil servants -- and millions of new, dues-paying members. The Wall Street Journal's September 10, 2009 op-ed ("Read the Union Health-Care Label -- Get ready for Detroit-style labor relations in our hospitals"), describes state-run health care as opening "the door to implement forced unionization schemes" by reclassifying in-home health-care (and child-care) contractors as union members.

But why is the SEIU so desperate for state-run health care? Put simply, union bosses appear to be underfunding their members' pensions, deliberately and systematically, while enriching their own plans. And someone has to make up the shortfall. That someone is you.

Of all major unions, the SEIU appears to be one of the worst at the practice of underfunding its retirement obligations. Aside from being a major supporter of the far left Democrat agenda, it is tied to ACORN and its variants, the the disgraced posse of community agitators. So the act of skirting ethical, legal and moral hurdles doesn't appear to be a stumbling block for this crew.

The Rank Hypocrisy of the SEIU

The SEIU argues on its website that 401(K) plans are bad for workers. It claims that defined benefit funds are superior tools to assure workers' pensions. It would seem reasonable that the SEIU, then, would ensure that its 2 million members would benefit from generous, well-funded pensions.

But that is not the case -- at least for rank-and-file union members. ATR reports that:

• In 2006, the average SEIU members' pension plan was only 82% funded with assets of about $19,000 per person.
• Separate funds for employees of the SEIU itself were 105% funded, with about $85,000 per person.
• And funds covering SEIU officers and employees were 123% funded, holding roughly $80,000 per person.

However, only ten years earlier, in 1996, the SEIU National Industry Pension Fund possessed nearly 110% of the funds it would need for all of its pension obligations.

The Reason for the Disconnect Between Union Bosses and Members

So why are the union bosses' pension plans overfunded at 123% and the rank & file union members plans are near "endangered status" at 82%?

While the union blames market conditions, actual fund performance metrics demonstrate that this is not the case. It appears, instead, that the playing field has been tilted to reward the union bosses and union employees at the expense of the rank-and-file.

The problem exists not only in the SEIU's national plans. The U.S. Chamber of Commerce revealed that 13 SEIU local pension plans were less than 80% funded. Six were less than 65% funded, clearly in a danger zone.

For example, the Massachusetts Service Employees Pension Fund fell from nearly 110% to 70% funded in 10 years; and the SEIU 1199 Upstate Pension Fund fell from 115% to 75% since its inception in 1999.

To regain some semblance of fiscal stability, the SEIU has wagered heavily on forcing other employees to help fund its shattered pension reserves. That was the motivation behind the Employee Free Choice Act (EFCA) ("Card Check"), a major Democrat initiative for 2009, and one on which the SEIU spent tens of millions of its members' money.

Since Card Check is in serious trouble with lawmakers, state-run health care must suffice.

• The public option could force hospital and other health care workers into underfunded pensions, putting their retirements at risk
• The average union pension has resources to cover only 62% of what is owed to participants
• Less than one in every 160 union-represented workers is covered by a union pension with required assets
• The PBGC already supports upwards of 30,000 pension plans
• Pension Benefit Guarantee Corporation (PBGC), the governmental pension insurer, will assume $86.7 billion in liabilities by 2015
• The PBGC limits the benefits in multi-employer plans to $13,000 a year per retiree, compared with roughly $52,000 for single-employer plans.
• In 2007, the PBGC reported a deficit of $955 million, a $216 million increase from the previous year
• In July of 2009, the PBGC agreed to take on $6.2 billion in pension liabilities from bankrupt auto supplier Delphi Corp

DemCare was a Democrat payoff to union bosses, who fear what will happen to them when the massive pension disparity between workers and bosses becomes widely known.

DemCare was designed, first and foremost, to reward the SEIU. It's not about health care. It's about the redistribution of tax dollars from your wallet into the unions' coffers. And, no matter how these central planners, these masterminds, swirl the money around, their unfunded pension liabilities will crush taxpayers as certainly as night follows day.


Shayne said...

Think how much of that money could have been best given to the pensioners.

commoncents said...

THANK YOU for posting this! I love your blog!!

Common Cents

ps. Link Exchange?

Shayne said...

I understand now that Andy Stern is resigning from SEIU (read it at Weasel Zippers).

Think the opening on the Supreme Court has anything to do with it?