United States Pension Benefit Plan Design Innovation: Labor Unions as Agents of Change

Published in Mitchell, O. and R. Shea (Eds.) (2016). Reimagining Pensions: The Next 40 Years. Oxford, UK: Oxford University Press.

Pension Research Council WP 2014-10

Posted: 12 Nov 2014 Last revised: 3 Apr 2020

See all articles by David S. Blitzstein

David S. Blitzstein

United Food & Commercial Workers, Special Assistant for Multiemployer Funds

Date Written: September 1, 2014

Abstract

Labor unions played an historic role creating the occupational pension system in the private and public sectors in the post-World War II era. That system, which was dominated by defined benefit pension plans, is in decline. The transition to a new system is economically and socially painful, and has been accelerated by two financial crises in the past decade. This paper uses a case study of a private sector union to demonstrate how labor unions can influence the renegotiation of the pension contract for American workers. The case study describes how one union evaluated the pension crisis from a sustainability viewpoint, and responded pro-actively by developing a hybrid pension plan that attempted to align the interest of all the stakeholders through equitable risk sharing. The hybrid plan developed by this union eventually had a broader influence on the pension community at large and the public policy debate around the pension crisis.

Keywords: Labor unions, pension crisis, pension contract, hybrid plans, variable defined benefit plans, sustainable pension plans

Suggested Citation

Blitzstein, David S., United States Pension Benefit Plan Design Innovation: Labor Unions as Agents of Change (September 1, 2014). Published in Mitchell, O. and R. Shea (Eds.) (2016). Reimagining Pensions: The Next 40 Years. Oxford, UK: Oxford University Press., Pension Research Council WP 2014-10, Available at SSRN: https://ssrn.com/abstract=2523167 or http://dx.doi.org/10.2139/ssrn.2523167

David S. Blitzstein (Contact Author)

United Food & Commercial Workers, Special Assistant for Multiemployer Funds ( email )

United States

Here is the Coronavirus
related research on SSRN

Paper statistics

Abstract Views
534
PlumX Metrics