It must be nice to be spending 85 million dollars on political campaigns yet refuse to fully fund your own member’s pension plan. That, among other things, is exactly the sort of hypocrisy that it was revealed that the SEIU has been caught indulging in this week. Diana Furchtgott-Roth did yeoman’s work in detailing the state of the SEIU’s underfunded pension obligations in the New York Sun yesterday.
The Sun’s Furchtgott-Roth details the SEIU’s latest campaign against New York financier Henry Kravis of the private equity firm Kohlberg Kravis Roberts whom they accuse of all sorts of nefarious activities… none of which are actually breaking any laws. But as the SEIU attacks KKR, the Sun shows that they are not keeping their own house in order as they throw stones at others.
The pep rallies are another in a series of SEIU efforts to attack private equity firms. Apart from the silliness of making Mr. Kravis its target when its complaint really lies with Congress, the SEIU would do better to look in the mirror. In its own treatment of workers, especially worker pension plans, it falls short.
SEIU president Stern is trying to use the 30% stake that KKR has in the SEIU’s pension fund management as a club with which to beat KKR into accepting the SEIU political goals.
SEIU President Andy Stern is not above trying to use that business relationship as leverage to pressure KKR to embrace the SEIU’s political goals, either by threatening to harm KKR’s name, as with the July 17 rallies, or by controlling proxy votes in shareholder meetings.
One of the issues that the SEIU’s Stern is all in a dither about is worker benefits and how employees are supposedly not getting their due. So, since this is such a big, big issue who would imagine that the SEIU has a fully funded pension plan for its rank and file members?
You’d be excused if you might have assumed it was… but it isn’t.
Yet in 2006, the SEIU National Industry Pension Plan, a plan for the rank-and-file members, covering 100,787 workers, was 75% funded. That is, it had three-fourths of the money it needed to pay benefit obligations of workers and retirees.
So much for the SEIU caring about their lowly rank and file members. But wait, it gets worse. The pension the SEIU has for their own union leadership and their employees is funded at 103%! So, they’ve taken care of their own pals in union leadership positions and shafted the rank and file membership.
The problem of poor funding occurs not only in the national SEIU pension plan. Thirteen local pension plans, whose beneficiaries are almost all rank-and-file members, were all less than 80% funded, and, of these, six were less than 65% funded. The Massachusetts Service Employees Pension Fund fell from nearly 110% to 70% funded in 10 years, and the SEIU 1199 Upstate Pension Fund fell from 115% to 75% since its inception in 1999.
This is an outrage. Not only have they given sweetheart deals for the union leadership and shafted the rank and file, but Stern and his union pals have the temerity to attack other people for doing the same thing (yet to a far lesser degree) that THEY are!
But, there is an even further level of hypocrisy from the SEIU. Not only are they doing what they accuse others of doing — namely shafting the employees’ pensions — they are attacking KKR even as the SEIU has its pension invested with KKR at the same time. OK, so if the SEIU finds KKR so eeevil, why are they doing business with them?
Were I a union member (perish the thought) I’d be asking the SEIU’s leadership how they can spend 85 million dollars on political activism while my pension is going underfunded. It’s some of the worst, gross hypocrisy I’ve seen for a long time.
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