Carpe Diem

Who’d a-thunk it?

A municipal pension fund controlled by organized labor that mismanaged funds and contributed to Detroit’s financial downfall?

According to the NY Times:

Detroit’s municipal pension fund made payments for decades to retirees, active workers and others above and beyond normal benefits, costing the struggling city billions of dollars and helping push it into bankruptcy. The payments, which were not publicly disclosed, included bonuses to retirees, supplements to workers not yet retired and cash to the families of workers who died before becoming eligible to collect a pension.

How much each person received is not known. But available records suggest that the trustees approving the payments did not discriminate; nearly everybody in the plan received them. Most of the trustees on Detroit’s two pension boards represent organized labor, and for years they could outvote anyone who challenged the payments.

6 thoughts on “Who’d a-thunk it?

  1. 5600 companies turned their pension funds over to the PBGC – few were “labor” plans.

    so what do we say about those 5600 companies relative to the big bad nasty unions ?

    • The PBGC is not funded by general tax revenues. Its funds come from four sources: Insurance premiums paid by sponsors of defined benefit pension plans; Assets held by the pension plans it takes over; Recoveries of unfunded pension liabilities from plan sponsors’ bankruptcy estates; and Investment income. — Wikipedia, your favorite source

  2. 1 Its nice work if you can get it. The critical issue is who controlled the pension plans, but it does appear that it made some folks rich. If the unions controlled the plans then the lack of a restriction to paying what was earned was a failure by somebodies lawyer in the drafting of the instructions. (Or a deliberate oversight by the same lawyer)
    Is that not malpractice? Why not sue lawyers for malpractice as well.

  3. Meanwhile, the Veterans Department (VA) is skyrocketing past $150 billion set to double in next 10 years…pay, pay, pay taxpayers, the vets contribute zero cents to the plan…pay as you go…

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