A firm owns a factory. It charges rent to workers who use the factory to make widgets and sell on the open market. The workers unionize, forcing the firm to accept a lower rent. Netted out financially, the result is that the firm actually ends up with a liability (the promise to pay future pensions) bound to its asset, the factory. If that liability unexpectedly grows (due to unexpected improvements in mortality, for instance) then the only result is that the union can't push the rent as far below the market rate (since it can't push the rent below the rate at which the firm will abandon the factory to jettison the liability). In the worst case, the workers end up paying the market rate for the rent - any higher and they would just move to a new factory.
Now, if you are assuming that the factory workers are deceived into thinking they will receive benefits that, in fact, they will not, that may happen sometimes. Based on my (limited) observations, though, pension plan death typically happens in slow motion, and the plan will be closed and/or frozen long before it is forced to make benefit cuts. Thus even if younger workers are deceived, it will only be for a limited time and any losses would be small.
Now, if you are assuming that the factory workers are deceived into thinking they will receive benefits that, in fact, they will not, that may happen sometimes. Based on my (limited) observations, though, pension plan death typically happens in slow motion, and the plan will be closed and/or frozen long before it is forced to make benefit cuts. Thus even if younger workers are deceived, it will only be for a limited time and any losses would be small.
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