Multi-Employer Pension failures

[SteveL]

http://dealbook.nytimes.com/2014/04...s-teeter-and-fall/?_php=true&_type=blogs&_r=0

Saw this just now. Hope no one in the forum is counting on these guys!

 

[Texas Proud]

It does not look good for the unions...


If I were an exec in any company with a union, I would pay the exit fee as quick as possible and never join one again... seems like this is a liability like the state and local gvmt pensions....

 

[ERD50]

Scary stuff. I do recall, when looking through the PBGC site for details on my own protections, seeing these 'special rules' for multi-employer plans. They didn't apply to me, so I didn't dig into it, but they sure looked sketchy. I figured there were other protections built in (apparently not enough, according to this article).

But we've all seen statements like the following, and it just has me scratching my head:

Each company was making a final contribution to what is known as a “wasting trust,” which would have enough money to pay everyone’s pensions for the rest of their lives. Then the stock market crashed in 2008. Much of the money in the pool melted away, and there was no one left to turn to for more.

OK, and now the market is well above it's pre-2008 peaks - so hasn't that excuse (allowing for withdrawals at the lows) mostly gone away?

-ERD50

 

[pb4uski]

......OK, and now the market is well above it's pre-2008 peaks - so hasn't that excuse (allowing for withdrawals at the lows) mostly gone away?...

That excuse should be gone unless they needed to sell stock to pay benefits during that time - sort of a different version of sequence of returns risk.

 

[mpeirce]

Sad.

But a good argument for taking responsibility for funding your own retirement via 401(k)/IRA/etc.

 

[clifp]

I've read and posted more than view scary stories about pensions on the forum, but this one is definitely in the top 5.

It seems like a classic case of diworsification. Lets spread the risk among lots of participant so nobody feels any obligation to watch the financial closes.

The 401K/IRA method is far from perfect, but if crap happens it least the people who are to blame are pretty easy to identify.