WSJ says Union Pensions in the Red. Project Labor Agreements to the Rescue?

2 July 29, 2009  Federal Construction, State & Local Construction, Uncategorized

As has said before, one of the reasons construction unions push discriminatory and costly project labor agreements (PLAs) is because they are a windfall for their mismanaged and underfunded pension programs.

The Wall Street Journal’s July 26 opinion piece, Union Pensions in the Red, exposed the inadequate funding levels of numerous union pension plans’ and lists Big Labor’s pension troubles as a reason why they are pushing hard for the passage of the Employee Free Choice Act (EFCA), an issue ABC strongly opposes. Learn more about EFCA here.

“…it’s one reason union chiefs are so eager to rig organizing rules to gain more dues-paying members.”

The article lists examples of union plans in either the “endangered” or “critical” status.

You don’t hear labor leaders touting this kind of performance in their organizing riffs, and not many workers are patient enough to review the Form 5500 filings submitted to the IRS and Department of Labor that track these retirement savings. But the data show a steady decline in recent years that can’t be explained merely by the stock market.

Just as troubling is the disparity between the performance of union officers’ pension and benefit plans versus those of dues-paying members:

An even bigger mystery is that the unions do a far better job with funds created for their officers and employees than for mere workers. The SEIU Affiliates, Officers and Employees Pension Plan—which covers the staff and bosses at its locals—was funded as of 2007 at 102.2%. The plan for the folks at SEIU international headquarters was funded at 84.8%.

Union officer benefits are also far more generous than anything dues-paying workers enjoy. Consider again the SEIU, probably the country’s most powerful union. Their officers and employees get a yearly 3% cost of living increase, but SEIU members get none; officers qualify for an early pension at 50 or after more than 30 years of service, but workers can’t retire early with a pension; officers qualify for disability retirement after a year’s service, but workers need 10 years. In the land of union retirement, some workers are more equal than others.

Those familiar with the PLA issue know that pension provisions in typical project labor agreements:

  • Hurt retirement for non-union workers. Employer retirement contributions into union pension plans on behalf of non-union workers are forfeited unless workers join a union.
  • Keep underfunded and mismanaged union pension plans afloat.
  • Expose contractors to underfunded multi-employer pension withdrawal liability.
  • Increase costs to construction users because double pension payment (one payment for the existing non-union plan that workers deserve and one for the mandated union “windfall” plan from which workers will never benefit) is factored into bids from the rare non-union contractors that do bid on a PLA project.
  • Cut competition from non-union contractors that do not want to participate in PLA plans (because of the aforementioned reasons), which reduces the number of bidders and increases construction costs.

Since evidence suggests that some union pensions and overall union finances are in shambles, why would construction workers and their employers board a sinking ship via a PLA in order to work on federal construction projects over $25 million containing a government mandated PLA, as directed by President Obama’s Executive Order 13502?

The more important question is why is the Obama administration encouraging PLAs as government policy if PLAs steer non-union construction workers into insolvent union pension – and permit these union plans to steal their hard-earned pension unless they join and become vested in a union?  How could this be good government policy?

If you are concerned, then participate in the regulatory process to oppose Executive Order 13502 and government mandated project labor agreements.

This post was written by and tagged Tags:, , , , , , , , , ,

2 Responses to WSJ says Union Pensions in the Red. Project Labor Agreements to the Rescue?

kevin sullivan July 30, 2009 at 6:48 am

I never had the possabillity of a pension until I joined a union; I wish I had done it sooner. Go EFCA
kevin sullivan

BenBrubeck July 31, 2009 at 2:15 pm

Sounds like a rehearsed line from a union business agent! Kevin, are you one?

Leave a Reply

Your email address will not be published. Required fields are marked *