What's the Difference Between Public Pensions and Union Pensions?

In the ways that matter right now, not that much. Here is a more detailed look, by focusing on certain union pension plans, at the move towards cutting benefits in multiemployer pension plans that I talked about in my last post. It’s interesting for the details it provides on these particular circumstances, but it is also noteworthy for a few broader points it brings out. First, note the high return on investment that was assumed for purposes of one of the funds in question becoming solvent. This mirrors a problem that has come to light over the past few years with public pensions: way overly aggressive assumptions with regard to returns as a basis for projecting future solvency. Second, note the demographic problem of too few workers and solvent employers supporting too many retirees: that’s a death spiral problem for any pension fund that doesn’t already have the money in place to cover future liabilities and instead must rely on incoming cash flow to meet those obligations. Third, note the fact-based skepticism about a federal political solution being reached, mirroring the extent to which the public pension crisis is linked to a long term lack of political will, as I noted in my last post. And finally, fourth, note the same key dynamic that is at play in the public pension crisis: do you invest public funds to protect benefits or cut the benefits?