August 23, 2007: If UPS or ABF or any other corporation says they will do better than a $3,000 pension at 30 years, keep in mind that with the increased funding, that’s not hard to do. The Central States Fund is paying that now—and will be paying a lot more in a few years.
A Teamster under the national contracts, or contracts with similar pension contributions, now accrues $132 per month pension for each year of service. And in four years, that accrual will be at least $174 per month pension for each year of service. And going up each year after that.
Those amounts are only payable in full at age 62, because of the cuts Central States imposed at the beginning of 2004 in 30-and-out benefits. For each year under age 62 that a Teamster retires, that amount is cut by six percent. For example, if you retire at age 58, you have to cut that amount by 24 percent.
So if you retire at 58 this year, you lose 24 percent of that $132 and get $100 for this year. But in four years, you can retire at 58 and accrue about $132, which is 24 percent off of $174.
Timetable to Restore Teamster Benefits
TDU is urging all Teamsters to demand that the trustees of Central States give us a timetable or benchmarks that lead to restoration of unreduced 30-and-out pensions that our union fought hard to win. We should not settle the UPS contract without the immediate restoration of affordable healthcare and a roadmap for eliminating the six percent early retirement penalty.
Our pensions are going up. There is more money going into the fund, lots more. A few years ago the Central States took in $1 billion per year from employers. Now it takes in $1.5 billion and in four years it will reach $2 billion. The assets of the fund are going up.
So if UPS or ABF or any other employer tells you about some great pension they will offer, keep in mind that they may be comparing what they’ll give you in the future to what you can get now in the Teamster pension plan.
UPS’s first pension offer included a $3,000 a month after 30 years of service. In four years, the Central States plan will pay $5,220 a month for a new Teamster who puts in 30 years of service.
We need to be smart, check the numbers and not fall for a corporate sales job—especially with the future of our pension funds and union at stake.