One of the best open secrets in working for a public entity during one’s career is the ability to double dip on retirement and pensions plans. For example, if someone joins the military at age 18 and stays in for 20 years, they are guaranteed a percentage of the average of their highest three year pay period. Then, as the ‘retiree’ would only be 38 years old, if they were hired into a civil service position, or even as a U.S. Postal worker, they would be eligible for a second pension if they retired after another 20+ years with that organization.
But in the private sector it appears now that workers will not be given the same accommodation as a hidden rider placed within the most recent budget bill by Congress will allow the government to take or confiscate up to 60% of a workers earned retirement if they fall under the parameters of a multi-employee union.
A provision included in the $1.1 trillion spending bill that passed in the final days of the last Congress creates the possibility that certain current and future retirees could have their pension payments reduced by 60% — a prospect that experts say has been virtually unheard of until now.
“I think that this kind of takes an important step back from what has always been just a bedrock principle that you can’t cut back on benefits that have already been earned,” said Gregg Dooge, an attorney at Foley & Lardner in Milwaukee who has practiced pension law for 30 years.
The provision applies only to multiemployer union pension plans — those that cover more than one company’s workers — that face a high likelihood of running out of money within the next 20 years.
Multiemployer plans were developed as part of collective bargaining agreements and typically apply to union workers in professions such as trucking, food retailing, construction and mining, among others. There are about 1,400 such pension plans, covering about 10 million people. – JS Online
With the Federal government’s budget deficit continuing to remain over a trillion per year, and the national debt well over $18 trillion, Congress is desperate to find more revenue to pay for mandates that take up more than half of the nation’s budget every year. In addition to this, tax revenues since the credit crisis of 2008 have not recovered since most jobs created over the past six years have been part time, and near minimum wage, with interest due on the nation’s debt climbing with each new appropriations bill.
A few years ago, the former Speaker of the House Nancy Pelosi tried to push through a bill that would confiscate all retirement plans under the guise of ‘protecting’ the public from the risks of Wall Street and economic recessions. But the real reason is the same one used by Congress when they looted the Social Security trust fund over the past 30 years… to spend your dedicated retirement for their own programs and crony largesse. And as we rush towards a new financial collapse, where liquidity problems are pushing governments to pass laws making it almost illegal to hold cash, to believe that the government doesn’t want all of your money is to fail to realize that they have done these forms of confiscations many times before in our past.
Kenneth Schortgen Jr is a writer for Secretsofthefed.com, Examiner.com, Roguemoney.net, and To the Death Media, and hosts the popular web blog, The Daily Economist. Ken can also be heard Wednesday afternoons giving an weekly economic report on the Angel Clark radio show.