November 14, 2008: The crisis on Wall Street has millions of Americans—and many Teamsters—worried about their retirement.
Multi-employer pension plans, like our Teamster funds, are still the safest bet for a secure retirement—in good times and bad.
For years, corporate America has been telling members they would be better off if they had all of their retirement in a personal 401(k) plan—instead of the pension plans that hundreds of thousands of Teamster families rely on.
Some pundits even proposed replacing Social Security with personal savings accounts.
Those arguments looked pretty tempting when markets were up.
Now they look really scary.
In the first ten months of 2008, the average 401(k) account has lost 18 to 23 percent of its value, according to the Wall Street Journal. That paper said 401(k)s may be “a failed experiment.”
Not on Your Own
Why are workers in a multi-employer plan better off than in a 401(k) or a company pension? Because they’re not on their own, and their pension is based on a “defined benefit,” not just the whims of the stock market.
Our Teamster pension plans have some important protections:
1. You have a defined benefit: you know what you get when you retire. And after you retire, that amount cannot be reduced.
2. The fund pools contributions from different Teamster employers. So you have more protection if your company goes out of business or declares bankruptcy.
3. You can keep building your pension even if you change your job by getting a job with another covered Teamster employer. Even if you don’t stay in the same pension fund, many Teamster funds have reciprocity agreements that let you count your years in both funds.
Changes Needed in Pension Leadership
Our pension plans are the best road to a secure retirement. But it’s no secret that some members are losing faith in our Teamster plans.
It’s no wonder that members lose faith in our plans when Teamster officials hide problems, keep them in the dark, and let the employers call the shots.
The answer is greater accountability, and Teamster leaders who don’t blindly follow the lead of the employers or Wall Street investment firms.
In New York, members of Local 804 won the right to have regular reports on their pension at every union meeting, after they were blindsided with pension cuts.
In Baltimore Local 355, members are pushing for a Pension Bill of Rights guaranteeing members the right to know what’s going on with their pension—and the right to have a say when changes are needed.
We need Teamster pension trustees who understand that their job is not to keep the costs down for employers, but to fight to protect Teamster benefits.
Pension Divide at UPS
At the beginning of the year, UPS pulled 44,000 Teamsters out of the Central States Pension Fund.
The new UPS-only pension plan did restore early retirement for UPS Teamsters in Central States—but there was a hidden cost.
By 2013, the accrual rate for the new plan will be lower than almost every other UPS Teamster pension plan. Unlike other Teamster plans, in the new UPS plan, the company doesn’t have to make fixed contributions for each employee. UPS management will get to pocket the savings from lower benefits.
Worse yet, the pull-out divided our members and weakened the Central States Fund. It traded away the large and growing contribution from UPS to the fund for a one time payment of $6 billion.
New Corporate Attacks
Now other companies want the same deal UPS got.
That’s why Waste Management sent in their strike-breaking “Green Team” to Milwaukee this fall.
Their goal was to get Local 200 waste Teamsters out of the Central States Pension Fund and into a 401(k) plan. Local 200 Teamsters stood strong on the picket line for a month.
The International threatened to expand picket lines to other WM cities, but they never did, and the company forced members into an inferior 401(k) plan.
The International Union did not use Teamster Power on a national scale against a giant corporation to protect Teamster pensions.
Turn It Around
This is not an easy time to defend our pension plans. But we cannot back down and give up what Teamsters fought to win in earlier tough times.
Turning our pensions around will take the work of thousands of Teamsters working together.
TDU members are helping to build that movement. And you can help.
Get the facts on your plan. TDU and the Pension Rights Center won language in the Pension Protection Act that gives you new rights to get plan documents and actuary reports from your pension plan.
Contact TDU to see if members have already obtained the documents for your plan, or to get a sample letter you can send to your fund.
Keep other members informed. It’s harder for management to play games with our retirement when members are watching. You can help keep members informed by distributing Convoy or by holding a pension information meeting in your area.
Planning for the Future
“Pulling out UPS from Central States is now looking like a really bad idea.
“Give up $600 million a year of sure money for a $6 billion buy-out? If my math is right, the Hoffa administration traded away our retirement security for only ten years worth of what used to be a sure thing.
“Our union leaders are supposed to look ahead to problems down the road. Now it’s up to members like us to keep an eye on how our fund is doing—and look out for our long-term retirement security.”
David Manolis, UPS Local 391, North Carolina
A Pension Bill of Rights
“In Baltimore, we were blindsided when our officials announced that our accrual was being cut to zero.
“For years our officials told us that they were taking care of our fund. Now we know we can’t count on their word.
“That’s why we’re pushing for a Pension Bill of Rights. Members have the right to know how our fund is doing—and to have a say when changes are needed.”
Gary Payne, UPS Local 355, Baltimore