A Thought on Andy Stern and the SEIU's Pensions

I just read that Andy Stern has decided to leave, this at the high water mark of his power. Speculation is rife at what forced him out at this moment of triumph. It could be a personal scandal, or it could be some type of office scandal, or it could be some type of malfeasance. Its also possible that Stern simply wants a break, or as he puts it is"tired of the daily grind" . Call me skeptical on that one. The SEIU is a powerhouse that goes way back and has connections across this country, additionally it has connections to various pension plans that give it an incredible amount of sway across this country, from the SEIU:

The Service Employees International Union (SEIU) has more than 2 million public and private sector members in the United States and Canada. Our members work primarily in public service delivery, health care, and property services. These members participate in more than 50 instate, county, and municipal pension funds in 19 private ("Taft-Hartley") funds with more than $1 trillion in assets.

SEIU's members have fought long and hard to win pension benefits that will afford them a comfortable and secure retirement. This goal looms especially large for our members in low-wage jobs, who would otherwise have great difficulty accumulating the savings necessary for a secure retirement. Consequently, our union is deeply committed to ensuring that the pension funds in which our members participate continue to provide enhanced benefits and perform at a level adequate to meet their obligations.

The Capital Stewardship Program was created by the 2000 SEIU Convention to facilitate a more active partnership between SEIU and the trustees, administrators, advisors and investment managers of our members' pension savings in the pursuit of benefit improvements and of prudent, responsible, and financially sound investment policies.

Consider this article from Real Clear Markets on the SEIU's pensions:

In contrast, the Labor Department's Web site lists pension plans that are in financial difficulty. Several SEIU pension plans are in critical status, meaning they have less than 65% of assets needed to fund financial obligations to future and current retirees, or in endangered status, with less than 80% of needed assets.

What's the connection? The SEIU needs more new dues-paying members to pay for the retirement of current members if it is to rescue its pension plans from subpar performance. It's a Ponzi scheme that would make Bernie Madoff proud. With many of its members employed in health care, the union believes - not illogically - that if more Americans have health insurance, the demand for health care will expand and so will employment in the health sector.

I would say again, pensions in trouble, an abrupt resignation, and a history of political connections doesn't prove a thing, but it sure looks interesting. And its not like messing around with pensions hasn't happened before.

Thanks Pundite and Pundette for the feature.