A Case Study in Pension Bailouts

The 2021 American Rescue Plan Act included $94 billion for underwater union multi-employer pension plans with no strings attached. What do you know? A new study finds that Congress’s pension bailout has resulted in riskier investing and benefit increases—that is, moral hazard.

Researchers at the State University of New York at Buffalo, the University of Washington and Indiana University examined how Congress’s bailout of multi-employer pensions has affected management. Employers with a common union such as the Teamsters offer these collective plans, which are collectively bargained and jointly administered by unions and management.