Fiscal Cliff: Michigan Union Experiencing Same Pension Headache it Forces on Schools

Posted: Dec 03, 2012 12:01 AM
Fiscal Cliff: Michigan Union Experiencing Same Pension Headache it Forces on Schools

When it rains it pours for the Michigan Education Association.

It was recently defeated on Election Day when it attempted to pass a ballot proposal that would have enshrined collective bargaining in the state constitution. Now it’s in full panic mode about a rumored Right to Work bill that may be introduced in the state legislature.

So as the union’s power is waning, it appears the cupboard may be going bare, too.

The MEA has been foundering under staggering liabilities for the last few years, and it may have just gone over the cliff.

Despite only a minor drop in membership – less than 2 percent – a recently-filed financial report reveals the union’s net assets dropped from $-111 million to $-159 million in one year.

That appears largely due to a massive increase in its pension liability for its own employees

The union’s 2011 report revealed its pension and health care liability was $163,921,351. In 12 months, it ballooned by $44.6 million to a new total of $208,524,148. This increase accounts almost completely for the union’s massive $48 million drop in net assets.

The irony, of course, is that the union is suffering from the same type of pension liability headaches it routinely imposes on school districts and the state government.

The union is learning that it costs too much to guarantee employees sweet pension deals, particularly during hard times. Given that reality, one might expect the MEA to have more mercy on local school boards and the state when it comes to demanding cushy pensions for teachers.

MEA employees have demanded from the union what the union has been demanding on behalf of its dues payers. It’s a vicious, unsustainable cycle and everyone is paying the price.

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