We've been lamenting the poor (literally) state of teachers' pension funds but what about the union-run health insurance plans? Alas here's a story that had me beat. The Indiana State Teachers Association (ISTA) was investigating how to transfer the health portion of its insurance trust to an outside provider when the external auditor discovered some (ahem) troubling news: the fund has a projected $67 million deficit. The fund pays for long-term disability for teachers in 90 districts and health insurance in 30 districts (it's not clear whether those two overlap, however).
The whole situation is being investigated by the FBI and the IN Secretary of State's office. It seems the managers of the fund's portfolio made some very risky investments of their participants' funds--and when the market went south, the fund went south too. Meanwhile, the brokers handling the fund were getting paid big bucks and ISTA has been running around telling its participating districts not to fear and, more importantly, not to pull out. Guess who pays the bill if the fund goes bankrupt? Now the NEA has taken over the Indiana union due to "financial distress," since ISTA had no insurance on its insurance (it self-insured the insurance... go figure). Read more about this shocking story here, here, here, and here.
