UFCW Financially-Troubled National and Local Pension Funds

UNITED FOOD & COMMERCIAL WORKERS
FINANCIALLY TROUBLED NATIONAL AND LOCAL PENSION FUNDS

For years, UFCW union organizers have been telling prospective new members that nothing beats a union membership for a secure retirement. The inconvenient truth that they haven’t been telling workers is that their union-sponsored pension plans are underfunded, owe more in benefits than they have the assets to cover, and face strict measures such as freezing core benefits while eliminating others in order to recover from their severe financial distress.

An asset/liability ratio gauges a plan’s funding and financial health. At 100% or higher, the plan has enough assets to pay all of its promised benefits 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.

Of the 51 pension plans sponsored by the United Food & Commercial Workers, all but seven have funding levels which are in the endangered or critical range. The average funding level for the 51 UFCW members’ pension plans is only 67.4%. Only two plans were at or near full funding levels. This means that more than a 1.2 Million UFCW members are locked into underfunded pension plans.

Forty-four of these plans are in serious financial trouble with either endangered or critical funding levels as described by the Pension Protection Act (PPA). Their average funding level is only 62.7%. Together, these plans have almost a million participants and all of them are required to take steps to recover their financial health and avoid collapse. This may include freezing benefit levels or even eliminating some benefits altogether and drastically increasing contributions. This will tax current workers and employers to pay for poor fiscal management, planning and negotiations of the past.

Half of these weakened plans (22 of 44) are funded at levels described as critical under the PPA. Their average funding is just 57.8%. These severely underfunded plans will be required to adopt even more drastic cuts as part of their recovery. Dire news for their 583,780 participants.

The UFCW 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 union members will likely be thrown into a pension plan that is already sliding toward insolvency – thus, their pension contributions will be used in a ponzi-scheme to prop up benefits for current members and retirees, rather than provide a safe and secure pension of their own.

To quote the UFCW’s website, to the more than “1.2 million active, retired, former members and their eligible dependents” of the union’s pension plans, the issue of pension security “is more than an issue – it is survival.”