Meet America's Next Pension Casualty

Authored by Simon Black via,

In 1923, a young Jewish immigrant from a small town in modern-day Ukraine founded a candy company in Brooklyn, New York that he called “Just Born”.

His name was Samuel Bernstein. And if you enjoy chocolate sprinkles or the hard, chocolate coating around ice cream bars, you can thank Bernstein– he invented them.

Nearly 100 years later, the company is still a family-owned business, producing some well-known brands like Peeps and Hot Tamales.

But business conditions in the Land of the Free have changed quite dramatically since Samuel Bernstein founded the company in 1923.

The costs to manufacture in the United States are substantial. And business regulations can be outright debilitating.

One of the major challenges facing Just Born these days is its gargantuan, underfunded pension fund.

Like a lot of large businesses, Just Born contributes to a pension fund that pays retirement benefits to its employees.

And in 2015, Just Born’s pension fund was deemed to be in “critical status”, prompting management to negotiate a solution with the employee union.

The union simply demanded that Just Born plug the funding gap, as if the company could merely write a check and make the problem go away.

Management pushed back, explaining that the pension gap could bankrupt the company.

And as an alternative, the company proposed to keep all existing retirees and current employees in the old pension plan, while putting all new employees into a different retirement plan.

It seemed like a reasonable solution that would maintain all the benefits that had been promised to existing employees, while still fixing the company’s long-term financial problem.

But the union refused, and the case went to court.

Two weeks ago the judges ruled… and the union won. Just Born would have no choice but to maintain a pension plan that puts the company at serious risk.

It’s literally textbook insanity. The court (and the union) both want to continue the same pension plan and the same terms… but they expect different results.

It’s as if they think the entire situation will somehow magically fix itself.

Those of us living on Planet Earth can probably figure out what’s coming next.

In a few years the fund will be completely insolvent.

And this company, which employs hundreds upon hundreds of well-paid factory workers in the United States, will probably have to start manufacturing overseas in order to save costs.

Honestly it’s some kind of miracle that Just Born is still producing in the US. The owners could have relocated overseas years ago and pocketed tens of millions of dollars in labor and tax savings.

But they didn’t. You’d think the union would have acknowledged that, and tried to find a way to work WITH the company to benefit everyone in the long-term.

Yet thanks to their idiotic union, these workers are stuck with an insolvent pension fund and zero job security.

Now, here’s the really bizarre part: Just Born contributes to something called a “Multi-Employer Pension Fund”.

In other words, it’s not Just Born’s pension fund. They don’t own it. They don’t manage it. And they’re just one of the several large companies (typically within the candy industry) who contribute to it.

So this raises an important question: WHO manages the pension fund?

Why… the UNION, of course.

The multi-employer pension fund that Just Born contributes to is called the Bakery and Confectionery Union and Industry International Pension Fund.

This is a UNION pension fund. It was founded by the Union. And the President of the Union even serves as chairman of the fund.

This is truly incredible.

So basically the union mismanaged its own pension fund, and then legally forced the company into an unsustainable financial position that could cost all the employees their jobs. It’s genius!

Just Born, of course, is just one of countless other businesses that faces a looming pension shortfall.

General Electric has a pension fund that’s underfunded by a whopping $31 billion.

Bloomberg reported last summer that the biggest corporations in the United States collectively have a $382 billion pension shortfall.

Not to worry, though. The federal government long ago set up an agency called the Pension Benefit Guarantee Corporation to bail out insolvent pension funds.

(It’s sort of like an FDIC for pension funds.)

Problem is– the Pension Benefit Guarantee Corporation is itself insolvent and in need of a bailout.

According to the PBGC’s own financial statements, they have a “net financial position” of MINUS $75 billion, and they lost $1.3 billion last year alone.

The federal government isn’t really in a position to help; according to the Treasury Department’s financial statements, Social Security and Medicare have a combined shortfall exceeding $40 TRILLION.

And public pension funds across the 50 states have an estimated combined shortfall of $1.4 TRILLION, according to a 2016 report by the Pew Charitable Trusts.

It doesn’t take a rocket scientist to see what’s coming.

Solvent, well-funded pensions and state/national retirement programs are as rare as mythical unicorns.

Nearly all of them have terminal problems and will likely become insolvent (if they’re not already).

The unions are driving their own pensions into the ground; and the government has ZERO bandwidth to bail anyone out, least of all itself.

So if you’re still more than two decades out from retirement, you can forget about any of these programs being there for you as advertised.

But there is a silver lining here:

The government can’t fix this. The union can’t fix this. But YOU can.

YOU have the ability to take matters into your own hands and establish a robust, well-funded, tax-advantaged retirement plan.

One example is a “solo 401(k)”, an extremely cost-effective and flexible planthat allows you to squirrel away tens of thousands of dollars each year and invest in a wide range of potentially more lucrative asset classes, from private equity to cryptocurrency.

There’s a multitude of other options out there.

Fixing this problem merely requires a little bit of education, and the will to take action.

And to continue learning how to ensure you thrive no matter what happens next in the world, I encourage you to download our free Perfect Plan B Guide.


pods STP Thu, 05/10/2018 - 11:05 Permalink

It's all going down.  Either in a fiery Tesla crash, or a slow bloodletting of inflation.

Protect yourself with a 401k (the sum of which might by you a couple huevos if the gov has their way).

I'm sure the government has a plan. Which will go up like a Tesla battery once the FRN loses the reserve currency.


In reply to by STP

GeezerGeek pods Thu, 05/10/2018 - 11:35 Permalink

Maybe Bernie is correct in wanting to go full socialist on us. If Just Born became the property of the state then the employees would be government employees. Then the government could screw them just as it did to holders of debt instruments from GM and Chrysler, many of whom were union pension funds.

Socialism will save us!

In reply to by pods

BurningFuld pparalegal Thu, 05/10/2018 - 13:12 Permalink

Should get advise from these guys. My Canada Pension appears safe.

TORONTO, ON (May 18, 2017): The CPP Fund ended its fiscal year on March 31, 2017 with net assets of $316.7 billion compared to $278.9 billion at the end of fiscal 2016. The $37.8 billion increase in assets for the year consisted of $33.5 billion in net income after all CPPIB costs and $4.3 billion in net Canada Pension Plan (CPP) contributions. The portfolio delivered a gross investment return of 12.2% for fiscal 2017, or 11.8% net of all costs.

In reply to by pparalegal

glenlloyd any_mouse Thu, 05/10/2018 - 14:38 Permalink

Every response produced in the last ten plus years to 'fix' the problems in this country are just nothing but mirages. The 'solutions' are designed to do nothing but postpone dealing with the problem.

Our country has a tremendous ability to talk around the problem and just kick cans down the road.

No one wants to address the problem because it will put a stain on their record.

In reply to by any_mouse

Endgame Napoleon pods Thu, 05/10/2018 - 13:05 Permalink

Most private-sector employees who have 401ks—as opposed to the majority who do not—do not have enough in there at retirement to live on it in a meager manner for more than a couple of years. Kid yourself not: Most of the retired people are living on SS. Some teachers and other government employees have annuities. 

In reply to by pods

Endgame Napoleon KingTut Thu, 05/10/2018 - 13:21 Permalink

Funny, when I cold called offices in one of my jobs, overall, lawyers had less money to spend freely than many other types of business offices. Many lawyers are in business, with all of the overhead and other expenses, and they are conscious of the burdens. I met the quotas every month in that job, coming in between one — three. Other than one big firm in a large city, I had very few big-spending lawyer customers. There was one guy who kept placing orders and, interestingly, one who had been chosen to argue a case before the SCOTUS. This person was very penny-pinching, not at all a big spender. The SCOTUS chose a tiny, anonymous firm to argue a case. They apparently choose the most representative case, and this little firm just happened to handle that case. When they are self-employed, lawyers do know how it is, mathematically, to have limited funds in a business. They just have to mold themselves to the client. When their client is the union, they represent the union’s interests alone, as if the union’s interests were separate from the company. It is a symbiotic relationship. If the company folds, the workers lose their jobs. No need for a union or union bosses with bigly salaries. Salaried lawyers have very different situations than the lawyers with business overhead, operating costs and uncertain income streams.

In reply to by KingTut

Froman SmallerGovNow2 Thu, 05/10/2018 - 10:58 Permalink

Absolutely correct SGN.  If the IRS takes you to Tax Court or vice versa the Tax Court judges understand the tax laws and issues and ask intelligent questions because the Tax Court judges only hear, day in and day out, tax cases like bankruptcy judges.  However, the appellate courts are stacked with judges that are legal hacks that are appointed as political payback.  They have zero expertise in ANY subject.  These are the types of judges that are ruling on these cases.  Additionally, you will notice, as with the Illinois judge that ruled in favor of the unions, this is a judge from a liberal, unionized State (Pennsylvania).  Additionally, I believe that this is the same union (Bakers) that forced Hostess out of business because they would not work with management on a sensible contract.  As another pointed out, Just Born will file for bankruptcy, extinguish their pension liability, move production off-shore and keep their headquarters in the U.S. as a token gesture while the union bosses continue to collect $200k+ a year off of union dues and the workers get screwed.  

In reply to by SmallerGovNow2

waspwench ufos8mycow Thu, 05/10/2018 - 13:20 Permalink

Absolutely correct.   Does anyone believe that the gubbmint won't raid private pension savings (not to mention bailing in anything you have foolishly deposited in the bank.)    Any pension provisions which you attempt to make for yourself will be taken by the gubbmint - wealth redistribution dontcha know. 

The cashless society will prevent you from keeping cash, at home and the institution in which you will be required to keep your money will be raided by the gubbmint.

We are all screwed - welcome to UBI. They will keep you alive, just.

BUT people do not work if they can see no benefit for themselves from doing so and, therefore, we will quickly deteriorate into a society similar to the old USSR.   People will do the absolute minimum amount of work.   If they are able they will develop skills which they can use to produce what they need (food) and to barter for other things (I will fix your plumbing if you will fix my bad tooth.)  

I am old, I did not breed, I'm outta here.

In reply to by ufos8mycow

any_mouse waspwench Thu, 05/10/2018 - 14:07 Permalink

They confiscate via Mathematics of Inflation.

Everyday they debase the currency with massive deficits covered by Public debt paid for by Private interest.

The FED and the GOV then produce numbers that hide inflation and the debasement.

Corporations assist by reducing quality and quantity, hidden in deceptive packaging.

Almost, as if, they are in a conspiracy to rob the Nation's Wealth.

To think that was true would be a thought crime, or a mental illness.

In reply to by waspwench

Endgame Napoleon Stuck on Zero Thu, 05/10/2018 - 12:56 Permalink

This is insane. They should be rewarded, not punished, for keeping the business here, even though wage slaves abound abroad. The world of pensions has changed; the new employees need to accept that fact. The new hires should have pension contracts that reflect current conditions.

That has nothing to do with SS.

Employed people at all income levels—-even dual-high-earner couples, making multi-six-figure salaries, and poor womb producers whose major household bills are covered by welfare and refundable child tax credits up to $6,431—-pay only 7.65% SS tax up to $127,200 in yearly income.

Self-employed people of all types, including 1099 contractors making pocket money and little mom & pop shops with modest net income, pay 15.3% SS tax up to the $127,200 cap.

Most Americans do not even have pensions.

In reply to by Stuck on Zero

FireBrander ZENDOG Thu, 05/10/2018 - 09:41 Permalink


There is nothing wrong with workers banding together to get a fair share of the PROFITS.

Without the rise to power of Unions in the USA, you would have worked 50hr weeks starting at age 7 and worked for pennies until you died.

I'm not defending corrupt, disconnected from reality, Unions that want a share of a pie that doesn't exist...those will fail on their own.

Their ENTIRE "illegal immigrant" situation exists because of Corporate America's thirst for the EXPLOITATION of desperate people for profit. And, as a bonus, the "illegals" have destroyed the unions...when the "illegals" AND the unions are gone...the only thing left for Corporate America to exploit will be YOU!

First, they exploited the "Illegals" for profit; and I demanded deportation.
Then, the "Unions" failed and I cheered.
Then they deported the "Illegals" and I cheered again.
Then they had no choice but to "employ" me...and now I live in a "dormitory" (surrounded by a fence to keep me safe) making shoes for pennies an hour; any job is better than no job.

In reply to by ZENDOG

FireBrander DisorderlyConduct Thu, 05/10/2018 - 10:08 Permalink


Wait until your "skill set" is put up against the same "skill set" of someone from China or India willing to work for 1/4 of what YOU think you are worth.

You are delusional if you think the Robber Barons (RBs)are going to pay you "what you're worth". Wow! I'm sure they get a good chuckle at just how stupid people are..."I'm WORTH"> all the unions are gone and the RBs are in full control, AGAIN, you'll be "worth" what they tell you you're worth.

1800's USA here we come!

(RBs) The metaphor appeared as early as February 9, 1859, when The New York Times used it to characterize the unethical business practices by Cornelius Vanderbilt. Historian T.J. Stiles says the metaphor, "conjures up visions of titanic monopolists who crushed competitors, rigged markets, and corrupted government. In their greed and power, legend has it, they held sway over a helpless democracy."[2] Charles R. Geisst says, "in a Darwinist age, Vanderbilt developed a reputation as a plunderer who took no prisoners."[3] Hal Bridges said that the term represented the idea that "business leaders in the United States from about 1865 to 1900 were, on the whole, a set of avaricious rascals who habitually cheated and robbed investors and consumers, corrupted government, fought ruthlessly among themselves, and in general carried on predatory activities comparable to those of the robber barons of medieval Europe."[4]

I just can't stop laughing picturing you reading off your "Skill Set" to the next Vanderbilt and telling him what you're "worth"...omg..thanks for the great laugh.

In reply to by DisorderlyConduct

DisorderlyConduct FireBrander Thu, 05/10/2018 - 10:58 Permalink

I interview and hire a lot of people from India. But for one hire, we filter out about 500-750 applicants.

Life is never static. I increase my value constantly. Others will try to compete with me. That's OK and quite healthy. It keeps me on my toes.

Your argument is pathetic. As if competition is the problem. Loser. I work for a guy that built a business up from his garage to being over $750M/year, and I'm sure his net worth is impressive. Without people like him creating an environment where people can work and prosper, you're left with nothing. His efforts now result in employment for thousands.


In reply to by FireBrander