New England UPS Teamsters Approve Change

September 17, 2012: UPS Teamsters in New England have voted by a large margin to approve a pension change favored by the company and the pension fund. Voting took place at regional meetings, not by mail, so an estimated 15-20% of the 10,200 participants voted.

The proposal is to move all UPS Teamsters in the six New England states to a new plan which will still be within the New England Teamsters Pension Fund, but under very different terms. Approximately 20 other New England Teamster employers, including DHL have made a similar move.

Under this proposal, UPS will be given a $2.30 per hour reduction in its contributions to members' pensions—from $8.50 to $6.20 per hour.

The $6.20 rate would be frozen for ten years. UPS will not increase its contributions to members' pension plan for a decade. UPSers' pension accrual will be frozen for ten years too. On the flip side, there is a guarantee that their pension accrual will not be reduced.

When the national UPS contract is bargained, apparently the company will save 75 cents per hour in each year, due to a lower pension contribution commitment compared to other areas.

Union officials sold the deal as something which the pension fund wants, and the company wants, and members will suffer no pension cuts (or raises) for 10 years. Also, they say it will deter UPS and the IBT from letting UPS leave the Teamster fund altogether, as was allowed in the Central States area in the last contract bargaining.

As part of the deal, UPS will pay off its share of the fund's unfunded liabilities to the Pension Fund. The deal would allow the company to pay off its debt over a fifty-year period—which is unprecedented. When UPS withdrew from the Central States Plan in 2008, the company paid $6.1 billion in withdrawal liability immediately, but in New England, UPS would pay $43 million per year, over fifty years.

Union officials stated it is happening now, right before bargaining, because UPS wanted to finalize it prior to the end of the pension fund's fiscal year, when UPS's withdrawal liability would go up. Normally, a contract change of this magnitude would be discussed at the bargaining table. Given UPS's eagerness for the change, the Union would be expected to negotiate something in return.


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