New England Pension Fund

August 20, 2010: The New England is our union’s third largest fund.

Where it stands and what it will take to protect our pensions and rebuild union power.

A new Actuarial Valuation Report from the New England Teamsters pension fund shows that the fund is seriously underfunded. But it can recover with a long-term plan to build Teamster power.

The March 2010 report was obtained by members under the disclosure provision of the Pension Protection Act, and is now available on www.TDU.org. It indicates that the plan is 52.6 percent funded; the fund has liabilities of $6.2 billion and actuarial value of assets of $3.2 billion.

Like many other Teamsters, New England members received an Annual Funding Notice earlier this year, informing them that their pension plan remains in the “Red Zone,” or critical status.

The fund’s Rehabilitation Plan includes requiring contracts to include a whopping ten percent increase in employer contributions every year. The fund trustees say no benefit cuts are planned. In 2005 the plan froze accruals at the level at that time, so further contribution money goes to fund the rehabilitation plan.

Like other major pension funds, the fund is not receiving contributions from YRC, and YRC Teamsters are not getting any pension credits. On the plus side, the New England Fund gets contributions from UPS part-timers, as well as full-timers.

The report indicates that as of October 2009 the fund had 24,714 active participants and 31,525 retirees. The actives are down about 1,000 from the previous year, presumably due to layoffs.

Threats on the Horizon

Teamster pensions are under attack. They’ve been weakened by the economic collapse brought on by Wall Street. And they’ve been undermined by our union’s failure to organize new companies into the funds. Strong Teamster pensions provide retirement security earned by a lifetime of hard work. They are also a key building block of Teamster power—and historically a reason workers wanted to join our union.

It’s up to Teamster leaders and members alike to defend our pension plans and build a strong legacy for the future.

The New England Fund is our union’s third largest. Its size is an asset, but also makes it a target for employers who want to pull out of it, including UPS.

A UPS pullout would be devastating to the New England Fund, as it has been for the Central States Fund, where Hoffa signed a deal letting UPS pull out and put Teamsters into a much cheaper company plan.

The company plan reportedly costs UPS approximately $3.12 per hour, compared to well over $7 per hour in New England. So UPS could save a bundle by pulling out, and weaken our union in the process.

Corporations like Waste Management and PepsiCo try to find weak bargaining links to get out of Teamster plans, as a step toward breaking our union.

Rebuilding Teamster Pensions

We need a union plan for rebuilding the New England Pension Fund.

The short term answer is to protect our contracts, say No to any pension pull-outs by employers, and bargain enough money to support the pension plan.

But a longer term plan is needed to broaden the employer base of the fund, increase the number of participants, and allow the plan to be funded without draining so much bargaining power just to maintain our pensions.

That means organizing new employers—and bringing them into the fund. It can be done. Our union is based in industries that cannot move overseas, and most are growth industries.

A deal with UPS got UPS Freight workers into our union, but kept them out of our pension funds. That kind of deal is short-sighted, and kicks the problem down the road. Corporations have long-range strategies. We need them too.

Political action is another part of the answer. We need to build our political clout to pass legislation such as the Employee Free Choice Act, and the Create Jobs and Save Pensions Act.

But to get these reforms passed, we need to mobilize Teamster power, starting with our members. Our lobbyists can’t do it by themselves. And Hoffa’s blogs and press releases won’t do it either.

Strong union pensions are worth fighting for. We need union leadership with a plan to lead that fight.


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