Unfunded pension promises were the result of decades of reckless actions by union plans that have been allowed to operate under a separate set of toothless laws.
If union plans were held to the same standards as single-employer plans, the overwhelming majority of unionized plans would have already been taken over.
Policymakers should correct past wrongs by equalizing the rules of union and nonunion pensions and by treating unionized and nonunionized workers equally.
Congress is set to vote this week on HR 6929 to retroactively bail out the pensions of about 20,000 former Delphi auto-parts employees who had their pensions reduced beginning in 2009.
This proposed bailout, the Susan Muffley Act of 2022, is different in a number of ways from the recent no-strings-attached $97 billion bailout of about 250 select union pension plans, but it highlights the problem of lawmakers putting powerful unions above the law and requiring taxpayers to pay for their wrongdoing.
Unequal Treatment of Pensions
In March 2021, Congress passed the first-in-history taxpayer bailout of private union pension plans as part of the American Rescue Plan Act. Despite the Rescue Plan allegedly responding to COVID-19, this bailout had nothing to do with the pandemic.
Multiemployer pensions for unions had accumulated $757 billion in underfunding and were on track to pay only 42 cents on the dollar in promised benefits as of 2018—well before the pandemic began.
Those unfunded pension promises...
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