“Transformation” of Pension Plans

In his speech at the Republican National Convention, President Bush addressed pension plans in only one paragraph. He said the following:

“This changed world can be a time of great opportunity for all Americans to earn a better living, support your family, and have a rewarding career. And government must take your side. Many of our most fundamental systems--the tax code, health coverage, pension plans, worker training--were created for the world of yesterday, not tomorrow. We will transform these systems so that all citizens are equipped, prepared, and thus truly free, to make your own choices and pursue your own dreams.” (Emphasis added)

Let there to be no mistake, the Central Pension Fund was not created for a world of yesterday and it should not in any way be transformed for whatever world of tomorrow the President may envision.

This Fund was created 44 years ago to serve workers primarily in two industries: construction and building maintenance. The Fund was designed to address the fundamental characteristics of those industries --- characteristics that in the absence of the Central Pension Fund rendered it impossible to provide retirement security to the workers in those industries.

Both industries were characterized by small fragmented employers, mobile workforces and, in the case of construction, seasonal employment. The characteristics of these industries remain exactly the same today. Global competition affects neither --- nor can it.

The Central Pension Fund model remains the most viable structure for delivering real retirement security to the workers in the industries we serve. That has not changed, and will not change.

Whenever politicians talk about “transforming” pension systems, “so that all citizens…are truly free…to make your own choices” they are talking about replacing defined benefit pension security with risky 401(k) plans. They are not talking about freeing citizens; they are talking about freeing employers from pension obligations, and shifting the burdens and risks of retirement security to workers.

As shown repeatedly, this “transformation” is good for employers, great for Wall Street, and terrible for workers.

The International Union of Operating Engineers will continue to fight for our nationwide system of defined benefit pension plans and oppose the “transformation” so desired by Corporate America, Wall Street, and their political allies --- Democrat or Republican.