New England UPS Workers Vote on Big Pension Change

September 7, 2012: Over 10,000 UPS Teamsters in New England are set to vote on a massive change in the structure of their pension plan.

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.

Under this proposal, UPS will be given a $2.40 per hour reduction in its contributions to members' pensions—from $8.50 to $6.10 per hour.

Even more importantly, the $6.10 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.

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.

Teamster officials in New England are promoting the deal as a way to keep UPS in the pension plan and to help stabilize the fund for the long term.

The company's motivations are clear. UPS wants to get out of Teamster pension plans that have withdrawal liability and they want to reduce their pension costs in the process.  UPS senior vice president John McDevitt has promoted the deal as "cost-effective."

It is not clear why this change is happening now—just weeks before contract negotiations. 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.

RIGHT TO VOTE

Teamsters have a right, guaranteed in the IBT Constitution, to vote by secret ballot on any modifications to the contract (Article XII, Section 2(b) of the Constitution.)

Members also have a right to a "fair and informed" vote, according to court cases won by Teamsters for a Democratic Union and involving UPS Teamsters and others.

The vote will be conducted at regional meetings in upcoming weekends. To date, members have not received any written copy of the proposed changes.

To make an intelligent decision, UPS Teamsters in New England have a lot to learn in a very short time.

MEMBERS' QUESTIONS

Some questions members are asking are:

  • If UPS pulls out of the main pool of the pension fund, what is the long-term impact on the pensions of retired UPSers, and of all the other Teamsters in the plan?
  • If UPS is getting the deal they want, why the ten-year freeze on pension contributions? This is going to put New England UPSers way behind the national average in total compensation.
  • Why the rush, right before bargaining? Should this be on the table? Should such an important issue be carefully considered and voted by mail by all affected members?

WHAT DO YOU THINK?

Click here to send us a message.

Click here to read what members are saying about the UPS contract and view the most up-to-date Contract Negotiations Timeline.

Don't miss the UPS Contract Summit in Chicago at the 2012 TDU Convention. Meet UPS Teamsters from around the country working together for a stronger contract. Click here to register today!


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