Well, Happy New Year. Despite the massive efforts of almost every union in America in 2016 to get Hillary Clinton elected, they failed, and yet union rank and file members are reaping huge benefits after President Trump’s first year in office. You might have seen just a few days ago Presidential Spokeswoman Sarah Huckabee Sanders was mocking Paul Krugman for his November 9, 2016 prediction of an unrecoverable collapse of America’s economy right after candidate Donald Trump won the White House. Mr. Krugman, who was once a highly respected columnist, is now just a political hack for the left and was just flat out wrong, again.
What does it mean for union members, and by extension every American with a defined benefit pension plan? The huge run up in the stock market this year may just have saved them their pensions. From the Department of Labors website: “The Employee Retirement Income Security Act of 1974 (ERISA) is a federal law that sets minimum standards for most voluntarily established pension and health plans in private industry to provide protection for individuals in these plans. “
In simple to understand pilot terms, every December 31st, the Internal Revenue Service takes a snapshot of the assets in every defined benefit pension plan, it uses that single day’s number to determine the future funding requirements for the entire next calendar year. If the plan’s assets are at 90% or more of its project needs, all is right with the world. If they are less than 80% however, it triggers catch up contribution requirements. So just when a company’s probably struggling with a soft economy, a down stock market, and lagging sales, it has to deposit more cash into it’s pension plans. Often times, such as has happened in the airline industry, it has led to a death spiral, not just killing the corporation, but wiping out its employees’ safety net in the process.
From 41,000 feet in the air, I would not want to be a union boss trying to convince my members to vote for Democrats in 2018, or 2020. Not when President Trump has saved those members’ jobs, pensions, and financial futures. Just think after the recently passed tax bill, how much worse it will look for the Democrats in the upcoming year as our economy takes off. As Ayn Rand’s character John Galt said in her book Atlas Shrugged, “Get the hell out of my way”. MAGA; I love it!
photo credit: United Steelworkers – Metallos IMG_1668 via photopin (license)
