Teamster Leader Beats Employer Move to Slash Pensions

November 1, 2005:When employer and union trustees colluded to cut their pensions, Teamster members in New York Local 805 fought back. First, they elected new local officers who sued the employer trustees. Now, they’ve scored a major victory for pension justice.

Local 805 President Sandy Pope has finalized a settlement that reduces the pension cuts, raises members' pension accrual retroactively, and institutes sweeping reforms in how the pension plan is run.

In December, the Employer Trustees on the Local 805 Pension Fund slashed future pension benefit accruals to zero with the help of the former Local 805 President Gerry Whelan who voted in favor of the cut. The employer trustees then turned around and hired Whelan and his wife to run the Funds.

The Local 805 pension fight shows the right union leadership can make a difference in protecting our pensions. Local 805 is a small local with early retirement benefits of $2,500/month—not UPS or freight money, but a solid pension for a fund of it size. The employers slashed the pension to zero to avoid having to increase their contributions.

But a strong stand by the new reform leaders of Local 805 took on this pension scheme. In exchange for dropping the lawsuit in Federal Court, Local 805 won a settlement that turned back the pension attack:

  • Cut to zero eliminated: The accrual rate of zero adopted in December will never go into effect. The Union Trustees and the Employer Trustees will each hire an actuary to determine the highest future benefit accrual rate the Pension Fund can afford. The new rate will be applied retroactive to the beginning of the "zero period."
  • New, professional fund manager: The former union president who went along with the scheme and his wife are both gone from the fund. A professional fund manager has been hired.
  • Trustee reforms: The Board of Trustees of the fund will be restructured. The Union and the Employers will each add two new members. This reform will break up the clique of employers who dominated the fund. Of the two new Union Trustees, one will be a Local 805 retiree. The Union Trustees already includes two rank-and-file members.

Under the agreement, the employer trustees are required to accept the highest, prudent recommendation from the actuaries. While the accrual rate may not be fully restored (the Fund suffered market losses experienced by all Pension Funds), participants will be getting the highest benefit the plan can afford. The new Local 805 leadership and union trustees made a strong stand against the employers attack on members’ pension, and leveraged the best possible result for the members—all while keeping members informed every step of the way.

That’s a far cry from what happened in funds like the Central States and an example of the difference the right leadership can make when our pensions are under attack.

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