Math Is Hard, But It Is NOT This Hard

Meep has an update on the insanity of Multi-employer Pension (MEP) funds and the state of fail: Central States Teamsters Pension Fund finally gets its bailout money, as planned -- now what?

I mentioned math. You can dislike math. You can claim you are not good at math. (Do a web search for "You aren't bad at math; you're just lazy" and then get back to me on that.) What you can't do is ignore the realities that math describes. Well you can, but you will end up like someone ignoring a speeding tractor-trailer barreling down the road at them. You won't survive without outside help.

But here is the breakout:

Assets: $10.4 billion

Liabilities (valued at 2.43%): $58.6 billion

Expected payouts in 2021 (after the above): $2.9 billion
Expected contributions in 2021: $0.6 billion

Now it should be clear to the most math-challenged among you, that you can't pay-out $2.9 billion dollars every year, and take in $600 million every year without running out of money. But apparently the people who run pensions can't do math at that level.

So the Biden Administration gave them $36 billion to tide them over.

Let me go back to my 2016 post, which was so quaint.

May 2016: Central States: I Guess the Plan is To Run Out of Money

Note that 2016 is pre-COVID19. This is not, most definitely NOT, an issue brought on the pandemic. This is an issue of willful negligence, and malfeasance.

So they got bailed out. Which means that instead of running out of cash in 3 years, they will run out of cash in 20 years. At which point they will need another bailout, unless something changes. Do you expect anything to change?

And I stole the image above from Meep, because Central States Teamsters Pension Fund is NOT the only pension fund in this shape.

Just keep printing money. Or something. As Critical Drinker says, "Nah. That'll be fine."