May 20, 2011: The pension plan covering UPSers in the Central and Southern regions has a $1 billion shortfall and pays the lowest benefits in the country.
The new UPS-IBT Pension Plan, which covers UPS full-timers in 25 states, was only 60.7 percent funded as of 2010, according to its Annual Funding Notice and its Annual Report.
The fund is underfunded by about $1 billion, and deemed “at-risk” under government reporting standards.
A letter to members, signed by IBT Package Division Director Ken Hall, reports that all is well with the fund, presumably because UPS management expects to have the money to make the fund whole in the future.
The fund was created in 2008, after Hoffa and Hall let management pull 48,198 full-timers out of the Teamster pension, and put them in this corporate plan. All full-timers in the Southeast, Southwest and Central areas are in this fund.
On paper, the fund is jointly managed by the corporate execs and International Union officials. In reality, UPS management runs the fund. This multi-billion dollar fund does not even list an administrator. It simply reports the UPS corporate address as its administrator.
While the fund paid out $45.8 million in benefits in 2009, it paid $10.5 million in overhead. In other words, for every dollar paid out in benefits, the fund paid 22 cents in administrative costs, an unbelievably inefficient ratio.
UPS management bagged that $10 million for administration, writing a check to itself.
The fund did, after nearly three years, establish a website for participants, where Teamsters can use their password to check their pension credits.
That’s helpful. But as for information about the fund, this outfit is about as transparent as the CIA.
Federal law does require some information to be provided to participants, and posted at the U.S. Department of Labor website. However, the latest document available is for 2009.
A Substandard Plan
Teamsters are locked into a benefit level by the contract, a level that is substantially below what UPS Teamsters get in other areas of the country: the West, the Northeast, and Indiana and Illinois.
Last year, Teamsters for a Democratic Union (TDU) researched and published a comparison of UPS pension plans, available here. This is helpful, because as the next contract approaches, our goal will be to bring all UPS Teamsters up to the highest level.