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Private investment could come in and buy the future revenue stream on contributions and take over the current portfolios of some of the funds and guarantee some sort of retirement benefit, but likely lower than expected by the retiree base. Especially with participations with pensions going down, future payments will too.


So reviving the “pension” concept to get more people participating would be a good thing if a bailout was inevitable to ensure more future money coming in from participants.


Saving pension plans (labor and non-labor) would be a boon from a political perspective – lots of votes out there that would appreciate their retirements being supported / stabilized, more so than a bank or an auto company.


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Neil Callahan

Rosemont Seneca

401 Greenwich Street, Suite 400 | New York NY 10013 | 212-933-9965

1010 Wisconsin Avenue, Suite 705 | Washington DC 20007 | 202-333-1880

917-945-9516 (mobile)

866-749-8879 (fax)


From: Hunter Biden [mailto:hbiden@rosemontseneca.com]
Sent: Friday, May 28, 2010 7:39 AM
To: Neil Callahan; Eric Schwerin
Subject:


THE NEXT BAILOUT? Union pensions may be the next crisis - and the next bailout, as John McKinnon reports in The Wall Street Journal: U.S. lawmakers are laying the groundwork for a possible federal bailout of some faltering pension plans that are jointly run by companies and unions. The effort reflects a worrisome new problem in the nation's troubled retirement-savings system: the grim financial condition of such pension plans, known as multi-employer plans. They are common in the hotel, construction, trucking and other industries, and cover about 10 million workers, or almost one in four workers who have a private pension.

'Many multi-employer plans are struggling after years of financial hits and relatively light regulation. In the past two years, almost 400 plans have announced they are in bad condition, according to lawmakers. In response, some lawmakers are pushing a plan that would provide federal aid to a few of the ailing pension funds. But some conservatives and anti-union groups oppose the aid effort, arguing it could lead to a broader taxpayer bailout of the whole class of pensions, costing tens of billions of dollars.' http://bit.ly/aHBBPH

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