August 23, 2007: The assets of the Central States Pension Fund are on the rise and our union will lose long-term power in dealing with management if we let UPS split from the fund. Those are the findings of pension experts and industry observers according to areport in this month’s Traffic World magazine.
That’s exactly why our union should reject UPS’s bid to break up the Central States fund. Instead, we should be negotiating benefit improvements that will immediately restore affordable healthcare and provide a roadmap to higher pension benefits as Central States continues to improve.
Consider these facts reported by Traffic World, a leading industry publication read by shippers and investors:
- “The Central States Pension Plan shows significant increase in assets” with an estimated “$700 million increase in assets through the first six months of the year.”
- “Central States’ total assets—about $21.4 billion—represent a significant increase over the $18.7 billion reported by the fund in 2005....The total could tally $22 billion by the year’s end.”
- “The ratio of active Teamsters to retirees has almost stabilized. There are 212,000 retirees and 146,000 active (full-time) Teamsters.”
These figures all come from the June Central States Fund’s Financial and Analytical Information report—and they have pension experts optimistic.
UPS Teamsters who suffered pension cuts and saw our fund’s assets drop might wonder, “What’s happening here?” Part of the answer is that the 2003 benefit cuts helped restore the fund’s assets. But pension experts also say “Multi-employer funds usually run in cycles.”
“They’re working their way back,” from the post 9-11 stock market slump, says pension expert Michael Cagnina, who manages $199 billion in pension assets for nearly 500 clients.
UPS wants to break out of the Central States plan to save billions in benefit costs—a move that would reduce our union’s long-term power in dealing with the company.
“It is the Teamsters’ pension—and particularly the multiemployer plan—that gives the union much of its draw and power,” industry analysts told Traffic World.
“It would take away from the union’s voice—the workers’ voice,” pension manager Michael Cagnina said.