Intercepts

A listening post monitoring public education and teachers’ unions.

NEA Looking to Dodge Pension Obligations?

Written By: Mike Antonucci - May• 27•14

Almost exactly seven years ago, NEA found itself in a dispute with its retired employees because it was failing to fully fund its pension liabilities. The retirees received the support of the working staffers, and there were plans to picket the union’s Representative Assembly in Philadelphia that year.

Faced with an embarrassing public relations situation, the union agreed to reach 100% funding of its obligations by 2021.

After a recession, a weak recovery and unprecedented membership losses, NEA is in a bit of a bind fulfilling that promise. In 2010, it sought pension relief from Congress, bewailing how difficult it was to fund its defined benefit plans under current law. NEA government relations director Kim Anderson sent a letter to the House detailing the problems:

And it is not just the plans that are jeopardized by this funding crisis: many of NEA’s affiliated associations are being forced to postpone, curtail, or eliminate regular services, staffing, and capital improvements, often on top of increases in member dues. This is because, absent relief, the average NEA affiliate is facing the immediate obligation to make funding contributions equal to 37 percent of its payroll, just to maintain its defined benefit pension plan.

With membership still falling and national dues levels stagnant, it seems NEA is trying to renegotiate that 2021 deadline.

All of this was entirely predictable and, like state governments, NEA keeps hoping that some external force will make the impending catastrophe go away. So stalling is the preferred tactic.

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