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Healthcare and Pension

Union workers are more likely than their nonunion counterparts to covered by health care and receive pension benefits, according to the federal Bureau of Labor Statistics. In March 2007, 78 percent of union workers in the private sector had jobs with employer-provided health insurance, compared with only 49 percent of nonunion workers. Union workers also are more likely to have retirement and short-term disability benefits.

As the chart below illustrates, 81 percent of union workers participate in pension plans versus 47 percent of nonunion workers. Sixty-seven percent of union workers participate in defined-benefit pension plans, compared with 15 percent of nonunion workers. (Defined-benefit plans are federally insured and provide a guaranteed monthly pension amount. They are better for workers than defined-contribution plans, in which the benefit amount depends on how well the underlying investments perform.)

Note: Defined-benefit pensions are a subset of all pensions. Disability refers to short-term disability benefits. Source: U.S. Bureau of Labor Statistics, Employee Benefits in Private Industry, March 2007. August 2007. Prepared by the AFL-CIO.

401(k) vs. Defined Benefit Plan

It's no contest. For employers and employees alike, a 401(k) plan cannot begin to compare to IUOE's Central Pension Fund (CPF), a defined benefit pension fund.

 

CPF was established in 1960 by the International Union of Operating Engineers and union employers nationwide. It is the 4th largest labor-management pension fund in the United States with assets in excess of $10 billion. CPF receives contributions from 6,000 union employers at more than 9,000 locations throughout the United States. CPF has reciprocity with every IUOE Local Union fund in the United States, and four province-wide funds in Canada, and it's benefits are insured to the statutory limit by the U.S. Pension Benefit Guaranty Corporation.

  • CPF is a real lifetime pension – a 401(k) is just an individual savings account.
  • Employers pay no administrative costs and no payroll taxes on employee contributions with CPF – with a 401(k), employers pay both
  • CPF pays a guaranteed monthly benefit for life – 401(k)s pay a single lump sum with no guarantee it will last.
  • CPF provides spouse, disability and death benefits – 401(k)s do not.
  • CPF’s benefits do not depend on risky stock market returns – 401(k) accounts rise and fall with the markets.
  • CPF’s benefits are insured to the statutory limits by the U.S. Pension Benefit Guaranty Corporation – 401(k) accounts are not.