To further coddle unions, the Baucus substitute amendment #4369 to the Tax Extenders package provides a regulatory bailout to union pensions by giving them more time to pay current liabilities.
Paving the way for Sen. Bob Casey’s (D-Penn) full taxpayer funded bailout of union pensions (S. 3157, Create Jobs and Save Benefits Act of 2010), the 105 page Title III, (pages 68-105), allows plans to extend their amortization by 15 years for single payer plans and 30 years for multi-employer plans.
The provision also allows plans to “smooth” their losses for accounting purposes. This allows plans to “hide” their current losses and liabilities – resulting in a balance sheet where the liability to asset ratio appears misleading.
Amortization, in this context, is understood as the amount of time unions will have to replenish loss funds. Smoothing is a method of accounting for market gains and losses – extending this is the equivalent of a regulatory bailout
Extending time-tables is nothing more than a regulatory bailout to unions. Exacerbating the problem will not help current retirees when only one in every 160 mutli-employer pension plan has the necessary assets to meet obligations at retirement.
Single employer plans and multi-employer plans are two different plans with different mechanisms and should be treated as such. Playing politics by only allowing the business plans (singles) to get special treatment if the union plans (multis) do is irresponsible.
These provisions must be broken up and dealt with separately on the floor using the proper channels – not shoved into 105 pages contained within a massive Extenders package.
Attempts to blame the low funding level of union’s multi-employer pension funds on the 2008 economic downturn are blatantly false. In fact, many of these plans have been hemorrhaging funds for decades. The 2008 recession simply exasperated the current trend
These proposals are much too important to be shoved in a massive tax extenders bill. Proposed pension changes deserve the full legislative treatment – committee mark-up, floor time with amendments and an up-or-down vote on the record.