Economy
Related: About this forumInsurer Warns Some Pooled Pensions Are Beyond Recovery
Insurer Warns Some Pooled Pensions Are Beyond RecoveryBy MARY WILLIAMS WALSH June 30, 2014 3:03 pm
More than a million people risk losing their federally insured pensions in just a few years despite recent stock market gains and a strengthening economy, a new government study said on Monday.
The people at risk have earned pensions in multiemployer plans, in which many companies band together with a union to provide benefits under collective bargaining. Such pensions were long considered exceptionally safe, but the Pension Benefit Guaranty Corporation reported in its study that some plans are now in their death throes and cannot recover.
Bailing out those plans seems highly unlikely. But if they are simply left to die, the collapse of the federal insurance program is all but inevitable, the report said, leaving retirees in failed plans with nothing. It added that the program is more likely than not to run out of money within the next eight years as plan after plan collapses.
....
Much of the problem was demographic. The most troubled plans often had more retirees than active workers. Trustees of those plans realized that they were pushing the workers to tighten their own belts in order to let the retirees keep receiving bigger benefits than the workers thought they would ever get themselves. If they kept pushing, the workers or the sponsoring companies would drop out of the pool, setting up a slow but steady death spiral.
PBGC Report Shows Improvement in Single-Employer Plans, but Underscores Increased Risks to Some Multiemployer Plans
FOR IMMEDIATE RELEASE
June 30, 2014
WASHINGTON Despite substantial economic and market gains, multiemployer pension plans covering about 1.5 million people are severely underfunded, threatening benefit cuts for current and future retirees, according to the FY 2013 Projections Report released today by the Pension Benefit Guaranty Corporation. By comparison, the financial situation for private single-employer plans, which cover about 30 million participants, is projected to improve.
dixiegrrrrl
(60,010 posts)but it did not help that pension funds were/are heavily invested in crap such as fraudulent mortgage bonds, which were sold by fraudulent banks.
Carlin saw this coming.
LiberalEsto
(22,845 posts)These funds have been looted right and left for years, and those who worked long and hard to earn their pensions are being robbed of their retirements.
Criminal investigations are needed, and I doubt they will take place. All they have to do is stall and stall, while those robbed of their pensions die off.
mbperrin
(7,672 posts)I always note that highest management NEVER has trouble with their pension plans, golden parachutes, golden handshakes, government bailout, and the like.
Weird how that "demographic" stuff doesn't apply to them, isn't it? ALMOST makes you think they're robbing the peasants and then telling them that it just magically disappeared through the miracle of math!