February 21, 2008: Two times in the last 18 months, UPS has blindsided Teamsters in New York City by demanding pension cuts. Now Local 804 Teamster members are organizing to get the information they need to defend their pensions.
Two thousand members have signed a petition to propose changes to the Local 804 bylaws that will put more contract and pension information in the hands of the Local 804 membership.
In November 2006, UPS forced through a 30 percent cut in pension accruals in Local 804. Management claimed that without the cuts the Local 804 fund would fall into “Critical Status” (the “Red Zone”) when the Pension Protection Act went into effect.
An actuarial report was leaked that revealed that the Local 804 pension fund had earned dramatically substandard returns on its investments for a decade. AON Consulting reported that, “The average investment returns over the past five years have been a little more than 3%; over the past 10 years the average return has been just 6%.”
Local 804’s pension investment returns were worse than the Central States Pension Fund over the same five and ten-year periods—and worse than other funds managed by AON Consulting.
“For comparison purposes, we looked at another substantial fund we work with and the average returns over similar periods were 6% over the last 5 years and nearly 10% over the past 10 years,” AON reported.
According to AON, the Local 804 pension fund had a $378 million shortfall—and approximately $100 million of this was due to poor investment performance.
“Members were shocked. We had always been told that our pension fund was in great shape,” said feeder driver Pete Mastrandrea.
“By mandating that our union include a report on our pension fund’s performance at every general membership meeting, we can make sure that the membership is never blindsided like this again,” Mastrandrea said.
The second attack on Local 804 pensions came during UPS contract negotiations.
After months of secretive negotiations, UPS and Local 804 agreed to a new contract that would eliminate 25-and-out pensions for all new employees—a deal that was unanimously endorsed by the Local 804 Executive Board.
UPS sent every Local 804 member a letter saying that if the contract was not approved then it would be illegal for the fund to restore their pensions.
Members voted the contract down by 3 to 1 anyway.
As a result of their united stand, Local 804 members saved 25-and-out, defeated other givebacks and reversed the 2007 pension cuts.
Information is Power
The Local 804 Make UPS Deliver network showed that members can make a difference when they are informed and involved.
Many Local 804 members were still disappointed with the final contract and felt more could have been won if the membership had been better informed—about both contract negotiations and the real story with the Local 804 pension and the Pension Protection Act.
That’s when members decided to propose two changes to the Local 804 bylaws.
The first change will require the Executive Board to include a report on the Local 804 benefit funds at every general membership meeting.
The second bylaws change will mandate Local 804 to set up a Contract Committee to inform and mobilize Local 804 members whenever a new contract is being negotiated.
“This bylaws vote is about what kind of contracts and benefits we’re going to have in the future,” said shop steward Tim Sylvester. “Local 804 has always had some of the highest retirement benefits in the country. But we’ve fallen behind other funds like Washington D.C., Upstate New York, and the Western Conference.
“Local 804 has won top contracts and benefits by leveling with the members and getting people involved. We did that to win 25-and-out before the rest of the country. We did it in 1997. We can do it again,” Sylvester said.
Mandate for Change
Two hundred signatures are required to introduce bylaws changes in Local 804. As Convoy Dispatch goes to press, 2,000 members have signed each bylaws petition.
“Winning strong contracts and pensions by informing and mobilizing the membership is something that every Local 804 Teamster can unite behind,” said Jim Reynolds, an alternate steward and one of the leaders of the bylaws reform campaigns.
“Members proved that by signing these petitions in such huge numbers. This is really a mandate for positive change,” Reynolds said.
The proposed changes will be voted on at the next Local 804 membership meeting on April 20.