March 15, 2012: Protecting our pensions and healthcare has to be a top priority in contract negotiations.
UPS has come after our pensions at the bargaining table before—and can be counted on to do so again.
We need to be ready for the company's new threats to our pensions and retirement security.
The Pension Divide
The UPS Pension Comparison on pages 8-9 shows how UPS Teamsters earn very different pensions depending on what pension plan they're in—with the new UPS plan that replaced Central States paying the lowest pension benefit.
The new UPS plan gives the company a tool to play divide and conquer.
That means during any contract negotiations, management could offer a pension increase in the company plan—and go after pension benefits in the Teamster plans.
This is a cheap way for management to go on the attack—because a benefit increase in the new UPS plan costs much less than an increase in a Teamster plan.
UPS Pension Pullout
In 2007, UPS pulled out of the Central States Pension Fund—saving the company billions in lower pension costs. What Teamster pension plan will be next?
Hoffa and Hall claim that a "Memorandum of Understanding" protects Teamster pensions. That memo, at the back of the contract, says that UPS will not solicit members or local unions to change pension plans.
Do you really think management feels bound long-term by a short-term side letter?
UPS could break out of its current Teamster plan in New England without even violating the memo. The New England Pension Fund has set up a separate division, which allows companies to leave the regular Teamster plan and reenter a new division of the Fund.
The new division of the New England Fund has no withdrawal liability—which is the same incentive that drove UPS to dump the Central States Fund. The alternative New England plan is set up to regularly review its funding levels and lower pension accruals when needed to keep employer costs down.
No withdrawal liability and a fast track to pension reductions. That's right up UPS's alley—and a threat to watch out for, whether it comes in this round of contract negotiations or sometime down the road.
Central States Insolvency
The 45,000 full-timers in the new, cheaper UPS plan (Central and Southern areas) are still tied to the Central States Pension Fund. When a retiree there reaches age 65, he or she receives two checks to make up their pension. UPS pays a portion, and Central States pays the other portion.
But what if Central States goes insolvent down the road? Hoffa and Hall say "Don’t worry, UPS will make up the shortfall." And maybe UPS will—but that protection only exists if our union bargains it into the contract every five years.
If you are 50 years old and hope to live another 30 to 40 years, wouldn't you like to have more than a temporary memo of understanding protecting your pension?