Confusion Under the IBT-UPS Pension Plan

December 22, 2009: UPS Teamsters in the former Central States have more questions than answers about the new UPS pension plan.

UPS Teamsters in the Central and Southern Regions and the Carolinas have more questions than answers about the new UPS pension plan they were moved into on January 1, 2008.

With 44,000 active participants, you might think UPS could put up a website to help spread information, but they have not.

Issues that were once straight forward have become complicated. One example: what happens to your pension if you go to work for the union, as a business agent or officer?

The answer is more complicated than you’d guess. Some UPS Teamsters face a major pension cut if they go to work for our union. Others could cash in and collect their pension and a union salary at the same time.

If you work for the union temporarily, such as being pulled off the job for an organizing drive, then your local will simply pay UPS $25 per day to maintain all your pension credits without any changes. So far, so good.

But if you take a job as a business agent or become a full-time officer, the union is not permitted to pay into the IBT-UPS plan. Instead, the union pays into the Central States Plan on your behalf.

The new pension credits earned by officers or business agents in Central States cannot be combined with the IBT-UPS Plan toward 25- or 30-and-out. That’s because the IBT-UPS Plan has no reciprocity with the Central States Plan, or with any Teamster pension plan.

As a result, UPS Teamsters may take a hit on their pension to work for our union. That situation needs to be corrected. But it is fact at this time.

UPS Teamsters with high seniority may actually be able to cash in under the loopholes created by the new plan. It is illegal for a single-employer pension plan like the UPS-IBT plan to impose a rule against reemployment.

That means a UPS Teamster could retire with 25-and-out from the new UPS plan, go to work as a business agent, and draw his pension and business agent salary at the same time. On top of that, he or she would accrue new pension credits in the Central States Plan.

The UPS plan has provided a document to Local Unions on this matter, but the document itself raises a lot of questions.

We will try to provide answers to questions that members have on this or any other aspect about the IBT-UPS Plan. So fire away. Click here to send a question to TDU.

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