Unions, Pensions, and Union Pension Funds

This paper examines the role of trade unions as determinants of: pension coverage, expenditures by firms for pensions; the provisions of pension plans; and pension fund investments. It also examines the impact of union pensions on the age-earnings profile of union workers. It has four basic findings:(1) Unions greatly increase pension coverage, and alter the determinants of coverage, in ways that go beyond the monopoly wage effects of unionism.(2) Unions alter the provisions of pension plans in ways that benefit senior workers and that equalize pensions among workers.(3) Estimates of the age-earnings profile of union workers are seriously flawed by failure to take account of the union impact on pensions, which generally enhance the earnings of the oldest groups.(4) Union pension funds can and do shun the stocks of nonunion firms without lowering the value of the portfolio. Investments in actual projects which take lower returns are, up to a point, justifiable in terms of the full economic benefit accruing to workers