Union Should Secure the Retirement of Their Members

New op-ed discusses Teamster pension problems in Washington Examiner

One of the largest union pension plans is on the brink of insolvency, employers are already on the hook and soon taxpayers could be stuck with the massive bill.

The Teamsters’ Central States Pension Fund is underfunded by at least $18 billion and could face complete insolvency in 10 years. The union’s president says taxpayers should bail the fund out. Mackinac Center’s F. Vincent Vernuccio, director of labor policy, and adjunct scholar Jeremy Lott wrote about the pending crisis this week in the Washington Examiner.

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According to Vernuccio and Lott, the union should help meet the promises they made to their members of a secure retirement before they ask the taxpayers to bailout their failed pension system.

Teamsters helped manage [their members’ pensions] to the brink of insolvency and are not without means. In 2014, the union claimed just under $256 million in assets and $183 million in income, without adding in the locals.

In pension plans like the Teamsters, “Every employer is responsible for the retirement of every worker in the plan — not just those that worked for them. This can make them liable for the costs of other companies' workers.” However, the union, which controls half of the board in the plan, does not have any financial responsibility.

Teamsters President James P. Hoffa, Jr. has suggested a $30 billion taxpayer bailout. Vernuccio and Lott wonder, “Perhaps the union would do a better job of looking after its workers' retirements if it had some skin in the game.”

Read the full op-ed in the Washington Examiner here.

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