How rich: CTA parent group struggles with pension costs

by Chris Reed | May 30, 2014 8:30 am

The following news nugget almost has an Onion feel to it, it’s such a perfect commentary on the aggressively dishonest Maviglian/union narrative[1] about pension affordability. But it’s legit.

The California Teachers Association has spent years depicting complaints about the costs of pensions as being driven not by, you know, math — but by the evil agenda of those doing the criticizing. The CTA routinely characterizes pension reformers as people who are somehow doing the 1 percenters’ bidding by torturing the middle class. If you are a politician or a public figure of any kind, unless your name is Jerry Brown, you don’t get to question pension red ink in the Golden State without being attacked personally.

So guess who else is worried about pension costs? The CTA’s parent group, the National Education Association. And it’s been worried for a long time about being overwhelmed by the ever-growing tab for its defined-benefits program — since at least 2007. The excellent @ReasonReform Twitter feed[2] pointed me to this item[3] by Mike Antonucci on the Intercepts blog, which monitors teacher unions:

“Almost exactly seven years ago, NEA found itself in a dispute with its retired employees because it was failing to fully fund its pension liabilities. The retirees received the support of the working staffers, and there were plans to picket the union’s Representative Assembly in Philadelphia that year.

“Faced with an embarrassing public relations situation, the union agreed to reach 100% funding of its obligations by 2021[4].

“After a recession, a weak recovery and unprecedented membership losses, NEA is in a bit of a bind fulfilling that promise. In 2010, it sought pension relief from Congress, bewailing how difficult it was to fund its defined benefit plans under current law. NEA government relations director Kim Anderson sent a letter to the House[5] detailing the problems:

“‘And it is not just the plans that are jeopardized by this funding crisis:  many of NEA’s affiliated associations are being forced to postpone, curtail, or eliminate regular services, staffing, and capital improvements, often on top of increases in member dues. This is because, absent relief, the average NEA affiliate is facing the immediate obligation to make funding contributions equal to 37 percent of its payroll, just to maintain its defined benefit pension plan.'”

“With membership still falling and national dues levels stagnant, it seems NEA is trying to renegotiate that 2021 deadline.”

Join the club, NEA, join the club. As Antonucci writes …

“All of this was entirely predictable[6] and, like state governments, NEA keeps hoping that some external force will make the impending catastrophe go away. So stalling is the preferred tactic.”

I’m going to try to get details on how the CTA’s internal pension plan is doing. Should be fun.

Source URL: https://calwatchdog.com/2014/05/30/how-rich-cta-parent-group-struggles-with-pension-costs/

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