January 10, 2008: The Director of the Central States Pension Fund, Thomas Nyhan, told over 100 local union officers in December that he did not want UPS to split off from the Fund, but could not stop it because the International Union and management cut the deal. “We didn’t want to lose our biggest contributor,” Nyhan stated.
Nyhan also stated that
- Because of the UPS pullout, the ratio of retirees to active workers will eventually reach 3 to 1. (It was 1.4 to 1 in 2007)
- The fund is 63 percent funded, but will now rise to 75 percent with the $6.1 billion withdrawal payment from UPS. The funded ratio is growing due to pension cuts and increased employer contributions.
- The fund has made its cuts and implemented its recovery plan. No further cuts will be made.
- The rule that requires employers to increase contributions by eight percent a year should stay in place five years; then it can come down to six percent and then four percent.
- The Central States Health & Welfare Fund has been making in more money than it spends on benefits, and has 12.7 months of reserve funds.
- The average retirement age has increased in just five years from 59.5 to 61.5.
The last point shows the negative impact of jacking up the cost of retiree healthcare on our members and families. Many Teamsters just cannot afford to retire, and on average, Teamsters have to work two extra years, compared to just five years ago.