Somebody should be going to jail for commingling trust fund monies.

From yesterday’s paper:
http://www.detroitnews.com/article/2...funds-misspent

And another reason the retirees should want their representatives at the negotiations to be different than those for the active employees.

According to this report, pension fund trustees allowed active employees to set up an additional annuity savings account that was separate from the defined benefit plan. Seems the annuity account paid interest rates above what the general marketplace offered and “Many times, pension trustees gave employees a “far greater” rate than what the fund earned on investments.” They paid rates as high as 7.5% of interest.

When the interest paid out the active employees exceeded the interest earned on investments, then the trustees apparently dipped into the funds that were supposed to be held in a trust account for the retirees. Over the last 5 years $532 million was shifted from the trust account to the active employee’s annuity account. This is known as commingling of funds and in the real world people would be going to jail.

No wonder the pension trustees think they are underfunded by $829 million – they gave away $532 million of that amount to the wrong people!

While the report says this is “effectively robbing” from the trust fund, IMHO there was nothing “effective” about it – this commingling of funds is downright stealing.

If I were a current retiree, then I would be asking for the pension fund trustees to get that money back from the active employees or take it from the trustee’s pockets.

And then the article goes on to talk about the abuses of the 13th check. It never seems to end with these guys – articles are coming out almost daily. And the trustees and their supporters, will be the only ones shocked if the EM takes control of the pension funds.