August 6, 2008: Ever since the Baltimore Local 355 fund cut the pension accrual rate to zero, members have been asking why the cuts happened, and what the local is doing to restore the cuts.
Now their fund is telling them it won’t answer their questions. But members aren’t taking No for an answer.
In February, Local 355 President Denis Taylor said the fund would be in the Red Zone, the worst funding level, if he didn’t cut the accrual rate to zero. Members have had their pensions frozen since the cuts took effect on March 1.
Now the fund is officially in the Green Zone, the highest level. But how it got there has never been explained to members.
Rank-and-file members in Local 355 have obtained the actuary’s report that recommended the cut. What the report does not say: how big the cuts should be, how long they should last, or how the cuts will affect the fund.
When members requested an explanation of how the cuts are affecting the fund, the fund administrator refused to disclose their projections. The fund said they already answered members’ questions.
“They say they’ve told us everything we need to know, but they haven’t told us when our benefits will be restored,” said Keith Reinhard, a Local 355 DHL delivery driver. “Our pension fund is either keeping members in the dark—or they’re driving blind.”
Pension Protection Act
Rumors are circulating in the local that the Pension Protection Act, the new pension law that took effect on Jan. 1, forced the fund to cut the accrual to zero.
But the new law does not mandate cuts. The PPA requires funds to declare if they are in the Red Zone, Yellow Zone, or Green Zone, based on their funding level and other factors.
The law also requires funds in the Red and Yellow Zones to create a plan to get above 80 percent funding in 10 years.
Plans in the Red or Yellow Zones do not have to cut benefits. The Central States Pension Fund announced earlier this year that it was in the Red Zone, but assured Teamster members that no further cuts were planned.
“Like politicians, our officials have gotten comfortable with a long term in office and they think they can just sail through,” said Reinhard. “They need to be held accountable for their actions and deal with the problems in front of them.”
Pension Bill of Rights
Members of Local 355 have launched a petition campaign to win a Pension Bill of Rights to protect their benefits. The Bill of Rights includes:
- The right to be informed and to get regular updates about their fund.
- The right to an accrual and an end to the pension freeze.
- The right to have a say if cuts are needed.
The movement is catching on. “I met some other members before my shift one morning and asked other drivers to sign the petition,” reports Kenny Walker, a UPS package car driver at the Hunt Valley building.
“We got over 120 signatures in a little over an hour. Only two people we saw wouldn’t sign—and one of them was late and running to get in the building.”
Since the cuts, TDU members in the local started distributing more Convoys and special pension bulletins. TDU has lined up attorneys to help members obtain important plan documents from the fund. And TDU organized an informational meeting to give members the facts about the new pension law and their benefits.
“It’s because of TDU that we’ve been able to get information from our fund and get it out to members. Now our job is to make that network even bigger.”