January 26, 2007: First UPS demanded benefit cuts in out major Teamster pension plans.Now, management is trying to convince us that they have the solution to our pension problems.With our pension and retiree health benefits at stake, it's ciritical that working Teamsters get the facts.
UPS’s Plan Would Mean a Smaller Pension
UPS management wants us to believe that the company would deliver better retirement benefits. In fact, management’s own figures show that UPS would provide a smaller pension. How small? Try $2,811 a month for a Teamster retiring today after 30 years. That’s less than any Teamster pension plan.
Testifying before the Congressional Subcommittee on Employer-Employee Relations on March 18, 2004, UPS Senior Vice President John McDevitt testified that the company could earn 7.5 percent growth per year on pension fund assets. That’s a realistic number. It’s the same figure used by most pension funds.
You can calculate exactly how much the company would pool for your retirement by using the pension contributions our union has won over the last 30 years and appreciating it 7.5 percent every year. For example, if you started full-time UPS work 30 years ago, at age 28, and worked every single week, with no illnesses or injuries, the total funds in your retirement account would be $395,600.
That sounds like a lot of money, but remember it has to last you for your entire retirement. In the example above, you are 58 years old and could live another 25 or 30 years. In his Congressional testimony, McDevitt gave a conversion factor to turn that lump-sum into a monthly pay-out. According to management’s own formula, your monthly pension would be $2,811 per month for life.
This is less than any Teamster 30-and-out pension pays! And it gets even worse. When we checked with independent brokers, they reported that management’s conversion factor was inflated and that no one would give that high a monthly pay-out based on that lump sum.
Why does a UPS fund come up short of a Teamster plan—even using management’s own figures? Because in a Teamster pension, you don’t just collect on contributions made on yourself. You also collect on the contributions from Teamsters who didn’t work long enough to “vest” and earn a pension. In a union plan, that uncollected money is used to boost the pensions of Teamster retirees. In a company plan, that uncollected pension money goes to management.
If you want a copy of McDevitt’s testimony on behalf of UPS, and a spreadsheet showing the contributions and their worth for each year at management’s own 7.5 percent formula, contact TDU.
UPS Has Fought to Cut Our Pension
Management is spinning a lot of PR to try to convince us that they will look out for our pension. But actions speak louder than words.
Here is UPS management’s record when it comes to our pensions:
u UPS management’s representative to the Central States Pension Fund voted to cut our pensions and opposed a motion to increase employer contributions.
- UPS management’s representative to the Western Conference of Teamsters Pension Fund voted for benefit cuts, even though that fund is 100 percent funded.
- UPS management has 50 percent of the trustees on the Local 804 and Local 177 pension funds that cover New York City and most of New Jersey. UPS’s trustees demanded cuts and got them in New York, and are trying to get them in New Jersey, where they are now deadlocked to an arbitrator.
- UPS management refused to pay millions of dollars owed to two pension funds, in Virginia and New York. In Virginia, management stopped making required pension contributions when members were on vacation.
- UPS has been the number one supporter of legislation that would make it easier to cut our benefits.
Management hasn’t been looking out for our retirement; they’re leading the attack on our benefits. Management’s goal is to gain control of our pensions, with the ultimate goal of breaking our union altogether.
Other Teamster employers are pursuing exactly the same strategy. At Pepsi, management has succeeded in getting some local groups of Pepsi and Frito-Lay Teamsters out of union pension plans. In every case, this was followed by an attempt to bust the union.
No union means no bargaining means they pay what they want for wages, health care and pensions.
Teamster Solidarity Increases Our Benefits
Management wants us to believe that the company is ‘subsidizing’ other employers and that UPS Teamsters are losing out by being a plan with other Teamsters.
The fact is that UPS Teamsters won the benefits we have today by joining forces with other Teamsters. Freight Teamsters won record pension contributions from their employers in the 1950s, 60s, and 70s and built up our union pension plans when UPS was relatively small.
In the 1990s, UPSers teamed up with freight and other Teamsters to win the first 25- and 30-and-out benefits. That’s the power of Teamster solidarity.
Today, UPS is the largest single employer in the Central States Fund, Western Conference Fund, and most others. But the company is still only about 20 percent of the participants in those funds; some 80 percent are other Teamsters.
Our power to win benefit improvements comes through Teamster unity—not trusting management to take care of us in our retirement.