×
↓ Freedom Centers

Tag Archives: pension


Retailers stepping up in more ways than one

By Peter RoffNew Rockford Transcript

Despite the grim economic news, the V-shaped economic recovery President Donald Trump has talked about may soon be a reality.

The news that several novel coronavirus vaccines will soon be available may allow the lockdowns to end. If all goes as planned, Operation Warp Speed could lead to the nation recovering lost economic ground in months rather than years, even if the number of cases continues to rise.

Retailers across the country are contributing to Operation Warp Speed by ordering freezers, thermometers, and the additional medical gear needed to administer vaccines once they’re available. It makes sense. Since grocers and pharmacies offer flu shots, their support in delivering the vaccine is crucial given their thousands of locations in every city and county in the nation.

These public-private partnerships in Operation Warp Speed not only show we can beat this pandemic, but also highlight the benefits when America’s private sector steps up.

Over the last 10 months, retailers have taken the lead, offering “hero pay,” additional bonuses, and greater safety measures to keep their employees and customers safe. Their story is just one of many waiting to be told once all of this is behind us. But that’s not the only way this one segment of American business is stepping up to address the nation’s critical problems.

Employees from Albertsons, Kroger, and Ahold recently ratified agreements with 27 local unions to withdraw from a union multi-employer pension fund circling the drain and join the newly formed UFCW and Employer’s Variable Annuity Pension Plan. This change includes investments of nearly $2 billion from these companies that will improve the security and stability of future benefits for employees and modernize retirement benefits.

The issue of pension reform has been before Congress for some time, but it’s been stuck. If the nation’s pension plans fail in any significant way, with far too many of them currently underfunded, the required bailout that would follow would imperil any recovery, as well as long-term future prosperity.

What has just been accomplished is great news for all involved. Millions of workers in other pension plans may not be so lucky. Rather than bicker over the best way back to a pre-COVID economy, policymakers ought to be focusing on the pitfalls ahead. Many of them, like the need to reform the pension system, are not hard to spot.

Pension reform has long been an issue that elected officials on both sides of the aisle have recognized and have attempted to address but that never went far enough. For example, there are about 1,400 pension funds that are, according to the federal Pension Benefits Guaranty Corporation “collectively bargained plan(s) maintained by more than one employer, usually within the same or related industries, and a labor union” that are potentially in trouble.

Policymakers must take a balanced approached to the issue of troubled multi-employer pension funds that provide participants with the retirement income they depend on while not placing undue burdens on the employers who participate in them. A solution must be found soon to protect the 10 million or so workers millions enrolled in employed by manufacturers and retailers and mining and shipping concerns to prevent them from having their benefits reduced significantly or cut entirely.

The PBGC’s safety net for pension funds that default is shrinking. Insolvency may come as soon as 2025 as more and more multi-employer plans face financial challenges and member companies fail or enter bankruptcy. Many of these companies have been hit hard by the coronavirus lockdowns and been unable to keep up their contributions.

Companies like Albertsons, Kroger, and Ahold did not wait for government incentives to make the switch. They moved ahead because it’s the right thing for workers and that’s good for the corporate bottom line. Other companies and industries will hopefully follow suit because it’s good for workers, good for taxpayers, and great for America.

If Operation Warp Speed is to be deemed a success in the months ahead, it will be thanks not only to the pharmaceutical companies who created the vaccines but to the retailers who distributed and vaccinated Americans at record rates. Should our recovering economy continue its current trend, we will prevail because private companies invested their profits and resources to make it happen.


Start Tackling The Pension Problem Now

By Peter RoffTownhall Finance

Start Tackling The Pension Problem Now
Source: AP Photo/Bruce Schreiner

The politicians in Washington rarely let the important get ahead of the urgent and expensive. The spending spree they’ve engaged in to offset the economic impact of the coronavirus lockdown has obligated our children and grandchildren to trillions in debt it won’t be easy to pay off.

How did we get here? The blame doesn’t rest largely or even mostly with the Trump Administration. It goes back over several presidencies and springs from the unwillingness of Congress, no matter which party was in charge, to tackle the thorny issue of entitlements and the financial obligations they place on future generations.

It’s not just Social Security and Medicare that threaten to bankrupt us when they reach the tipping point. The problem of there being too many retirees living longer and healthier than the existing workforce can support is just a drop in the bucket compared to other worries that can already be seen coming at us over the horizon.

Take for example the issue of the many public and private pension plans these same retirees are counting on to provide for them in their golden years crash are now badly underfunded. If they’re allowed to come crashing down it will make what happened after Lehman Brothers failed look like a slight downturn in the markets.

You can blame the politicians for that too, not that it will do much good. The plans they created and authorized, in Washington and at the state level and for employees in the private sector were masterpieces of wealth concentration controlled by so-called experts who keep it all safe for later.

We know now it wasn’t true. These plans have been abused and raided for decades, more than once leaving the workers who funded them holding not the bag but nothing. Alternatives do exist now like Roth IRAs and 401(k)s. Anyone can open one, and often do with their employer contributing or even matching what an individual puts in. They’re preferable to the defined benefit plans of the past, not just because they don’t leave everyone exposed to a potential taxpayer-funded bailout if they go bankrupt but because the individual plans give workers at every level a significant measure of control over the retirement finances.

Every retirement plan should be moving in that direction. Even Social Security needs to make room for private accounts. But all thats’ for later, for the next generations of retirees. There are still problems endemic to the existing system that must be addressed.

One of the most urgent involves the nation’s approximately 1,400 multi-employer plans. As defined by the federal Pension Benefits Guaranty Corporation they are “collectively bargained plan(s) maintained by more than one employer, usually within the same or related industries, and a labor union.” More than one is in financial trouble and all need structural reform.

About 10 million workers are participating in these plans in fields from mining to manufacturing to trucking. They’re not only the so-called essential employees who’ve kept the rest of us supplied with foods and other goods and help keep the lights on and the Internet access up, they’re a powerful voting block.

If Mitch McConnell, Kentucky Republican who runs the Senate wants to continue to doing so for the next two years, he needs to make the issue more of a priority than it’s been according to a survey commissioned by the Retirement Security Coalition.

The group, which has conducted polling in the swing states where control of the U.S. Senate over the next two years will be decided, found voters care deeply about the issue. In Michigan, where the latest polls show the race very tight between incumbent Democrat Gary Peters and GOP challenger John James, a whopping 70 percent of the more than 440,400 people surveyed agreed these plans are endangered and in need of reform. Similar numbers come from states where other Senate races will help determine control of the chamber like IowaNorth Carolina, and Georgia.

Time is running out. Ohio Republican Rob Portman, a leading advocate for the reform of multiemployer plans, estimates they were underfunded by more than $638 billion before the coronavirus lockdowns went into effect. The number is almost certainly bigger now while the PBGC, which is the government guarantor for pension plans, is projected to become insolvent in less than five years. 

Portman’s proposed a set of commonsense reforms that at least deserve a hearing – preferably before retiree benefits start getting cut and the demand for bailouts start. 


WP2FB Auto Publish Powered By : XYZScripts.com