May 22, 2009: YRCW plans to put up real estate instead of pension contributions.
There’s no deal yet.
YRC’s proposal to put up real estate in lieu of payments to Teamster pension funds is still not finalized, as of late May, but the company, the International Union and at least one major pension fund are acting as if it’s a done deal.
YRC has made it clear they do not intend to make pension payments for the rest of 2009, and instead will put up real estate (terminal properties) as collateral. The International Union has green lighted the plan, as have YRC’s big lenders.
The pension funds, which have a fiduciary responsibility to their participants, continue to chew on the details and legality of the deal. YRC would avoid payments of approximately $40 million per month; over the next seven months that would be about $280 million, plus interest.
The Central States Pension Fund has convened a “Pension Fund Review Committee” of Teamster funds to analyze information and advise the funds.
At least one fund, the Central Pennsylvania Pension Fund, has already taken protective action: they have frozen pension accruals for YRCW Teamsters for the rest of 2008.