April 29, 2005: The recently announced pension cuts in New England went over like a Yankees victory in Fenway Park. The angry uproar by members and local officers has pressured the New England Pension Fund Trustees to reverse two of their most unfair pension cuts announced in July.
The new is not all good. The restrictions on 25-and-out and 30-and-out pensions before age 57 remain in place. New England Teamsters who did not have enough years of credit by July 31, 2005 will not be eligible for 25- or 30-and-out until age 57. Unlike in the past, the changes did not include grandfathering provisions to protect Teamsters who were close to making their 25 or 30 years and were planning to retire soon. Members are calling for the fund trustees to grandfather existing negotiated promises. Teamsters who were close to qualifying under the old rules should have their contracts honored.
Change #1: No Punishment for Continuing to Work
Under the original changes, Teamsters with 25 years who continued working after July 31 would have their pension frozen until they reach age 57. Then, at 57, the pension would snap back to the full rate. A member who had to retire before 57 because of injury or the closure of their company would get no additional benefit for their extra time worked.
The Trustees have now eliminated this “Snap Back” provision. If, and only if, you had 25 years on July 31 and were eligible for a special service benefit, then you will continue to earn the additional $150 per year and be eligible to retire at any age.
Change #2: Honoring Promises in Existing Contracts
Under the original cuts, Teamsters would have suffered a reduction in their pension accrual if they were covered by contracts that did not include annual increases in their pension contributions of 5 percent. This would have meant pension cuts for many New England Teamsters covered under multi-year contracts that were negotiated before the pension rules were changed.
The Pension Fund Trustees have backed off of this unreasonable rule. Now, the Pension Fund will honor all existing contracts by maintaining the accrual rate. When these contracts expire, the new contracts must include increased pension contributions of 5 percent a year to maintain the accrual rate.
Pension Reform, Accountability Needed
Both of the reforms to the original cuts address problems that were first reported by TDU. It remains to be seen whether membership pressure can convince the Trustees to introduce stronger grandfathering provisions that will protect Teamsters who were planning to retire under the old rules.
Teamster members and officers won these improvements by putting pressure on the Pension Fund Trustees. This is an example of how our union trustees on the pension fund are indirectly accountable if we apply enough heat. What is really needed is direct accountability.
The New England pension cuts show the need for us to elect delegates to the 2006 Teamster Convention who will back reforms to the Teamster Constitution to hold benefit fund trustees directly accountable to Teamster members–and to support candidates for International office who will defend our pensions from attacks by the employers and corporate politicians.
The new is not all good. The restrictions on 25-and-out and 30-and-out pensions before age 57 remain in place. New England Teamsters who did not have enough years of credit by July 31, 2005 will not be eligible for 25- or 30-and-out until age 57. Unlike in the past, the changes did not include grandfathering provisions to protect Teamsters who were close to making their 25 or 30 years and were planning to retire soon. Members are calling for the fund trustees to grandfather existing negotiated promises. Teamsters who were close to qualifying under the old rules should have their contracts honored.
Change #1: No Punishment for Continuing to Work
Under the original changes, Teamsters with 25 years who continued working after July 31 would have their pension frozen until they reach age 57. Then, at 57, the pension would snap back to the full rate. A member who had to retire before 57 because of injury or the closure of their company would get no additional benefit for their extra time worked.
The Trustees have now eliminated this “Snap Back” provision. If, and only if, you had 25 years on July 31 and were eligible for a special service benefit, then you will continue to earn the additional $150 per year and be eligible to retire at any age.
Change #2: Honoring Promises in Existing Contracts
Under the original cuts, Teamsters would have suffered a reduction in their pension accrual if they were covered by contracts that did not include annual increases in their pension contributions of 5 percent. This would have meant pension cuts for many New England Teamsters covered under multi-year contracts that were negotiated before the pension rules were changed.
The Pension Fund Trustees have backed off of this unreasonable rule. Now, the Pension Fund will honor all existing contracts by maintaining the accrual rate. When these contracts expire, the new contracts must include increased pension contributions of 5 percent a year to maintain the accrual rate.
Pension Reform, Accountability Needed
Both of the reforms to the original cuts address problems that were first reported by TDU. It remains to be seen whether membership pressure can convince the Trustees to introduce stronger grandfathering provisions that will protect Teamsters who were planning to retire under the old rules.
Teamster members and officers won these improvements by putting pressure on the Pension Fund Trustees. This is an example of how our union trustees on the pension fund are indirectly accountable if we apply enough heat. What is really needed is direct accountability.
The New England pension cuts show the need for us to elect delegates to the 2006 Teamster Convention who will back reforms to the Teamster Constitution to hold benefit fund trustees directly accountable to Teamster members–and to support candidates for International office who will defend our pensions from attacks by the employers and corporate politicians.
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