SEIU National and Local “Taft-Hartley” Pension Funds
For years, union organizers have been telling prospective new members that nothing beats a union membership for a secure retirement. The inconvenient truth they haven’t been telling their workers is that for years, their union-sponsored retirement plans have been underperforming.
The Service Employees International Union sponsors 19 private pension funds, also known as “Taft-Hartley” funds, which are subject to federal regulations put in place to protect workers’ retirements.
A funding ratio gauges a plan’s financial health. At 100% or higher, the fund has enough assets to pay all of its promised benefit and other obligations. Below that, it cannot meet its obligations. Under federal law, if the ratio falls between 65% and 80%, the plan becomes endangered. If it falls below 65%, the plan’s status changes to critical.
The truth that SEIU organizers do not share with workers is that all of their nineteen pension funds are underfunded. Not one of the SEIU pension funds for their members has the assets needed to meet its benefit obligations and pay its debts. The average funding level for the 19 SEIU members’ pension plans is only 76.9%. This means that more than a half million workers are locked into underfunded SEIU pension plans.
Of the 19 SEIU plans, 17 of them are in financial trouble with funding levels low enough to be considered either endangered or critical under the Pension Protection Act (PPA). The 17 plans have an average funding level of 61% and there are more than 330,000 participants depending on them for their retirements. Under federal law, these plans could be required to take specific steps to recover their financial health and avoid collapse. This might include freezing benefit levels or even eliminating some benefits altogether, thus taxing current workers and their employers to pay for poor fiscal management, planning and negotiations of the past.
Six of these plans, or about one-third of all of the SEIU’s private pension plans, are in such dire condition they would be considered to be in critical status under the PPA, with an average funding level of only 49.4%. Their obligations are more than double their total assets. Grave news for the more than 125,000 workers whose retirements are committed to these six plans.
The SEIU is a major proponent of the Card Check bill, which if passed will allow them to force more and more workers into these failing pension plans. Prospective future members of the SEIU will likely be thrown into a pension plan that is already sliding toward insolvency – thus, their pension contributions will be used to prop up benefits for current members and retirees, rather than provide a safe and secure pension of their own.