Private Pensions and Taxpayer Bailouts
Do you believe in government bailouts? I guess that is the first question you should ask yourself before you even get to the question of whether you believe that the taxpayer should bailout private pension funds.
The Washington Free Beacon is reporting on a New York Teamster Union Local 707 which has paid out all of the funds in their pension account. Now this is going to bring quite a bit of hardship to those union workers who were promised a fully funded pension by their union management but it appears will not be delivered.
The key point in the last sentence of the paragraph above was that the union management promised them a fully funded pension not the United States Taxpayer.
The local Teamster union has now had to turn over its pension fund liabilities to the Pension Benefit Guaranty Corporation (PBGC), an independent federal agency.
The Pension Benefit Guaranty Corporation (PBGC) was created in 1974 to provide retirees with some insurance in the event that their union or company-sponsored pension system goes bankrupt. The problem is that the PBGC more often than not requires the pensioners to take quite a bit less than the generous retirement packages that were promised them by their unions.
The Pension Benefit Guaranty Corporation program is not funded by taxpayer dollars, they are funded by premium contributions from pension funds and fund sponsors. The PBGC does place strict caps on payouts to retirees. The caps range based on the length of service of workers.
Some union Teamster Local 707 officials saw what was coming before the fund finally went bust. In fact the Local 707 president called on the Labor Department to investigate his union's handling of pension money in 2013 after it had faltered. He questioned the union's investing strategy which did eventually lead to a Labor Department investigation.
Local 707 President Kevin McCaffrey and others believe that the federal government should issue a bailout on par with the Obama administration's multi-billion dollar package for General Motors.
The Washington Free Beacon reported that Milton Acosta retired after two decades of bruising warehouse work in 2004, he banked on his $2,300 monthly check promised by the Teamsters Local 707. He is now looking at possibly only receiving a third of the $2,300 he was promised. He was quoted in the article stating:
"The only way this is going to get settled is if the government steps in. If they helped the automobile industry, why not us? We're American citizens and we worked hard"
Is it upon the taxpayer to bailout a private pension plan? Who is going to bail out my 401K or IRA if it does not produce what I was promised, I am assuming the people who want the taxpayer to bailout their private union pensions will pay into a fund to bail out my 401K, IRA and mutual funds.
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