April 10, 2009: The Local 804 Health Fund has lost another $1.9 million in assets, according to documents obtained by 804 Members United.
The Local 804 Health Fund has lost nearly $20 million over a five-year period. Its assets have dropped from $32.2 million in 2003 to just $12.5 million on May 31, 2008—the most recent figures available from the Fund.
The good news is that the Fund’s losses have started to level off. The Fund lost less than $2 million in the 2007 plan year, compared to losses of $4.5 and $6.8 million the previous two years.
In the fall of 2007, Local 804 officials voted with UPS to hike members’ co-pays. It remains to be seen whether those cuts and the contributions negotiated in the current contract will be enough to restore the Local 804 Health Fund to fiscal health.
Some Executive Board members have started blaming the cost of retirees for the Fund’s problems.
What Local 804 officials don’t tell the members is their own role in creating the financial problems at the Fund. The money negotiated in the 2002 “Best Contract Ever” was not enough to pay for members’ health benefits. For years, officials spent down the Fund’s reserves to make up for the shortfall.
With the Fund losing millions of dollars a year, Local 804 officials poured gasoline on the fire by voting with UPS to divert contributions from the Health Fund to the Pension Fund. After the diversion, the Fund’s assets nosedived—dropping a whopping $11.3 million in two years.
The Local 804 Executive Board never told members a word—about the losses or the diversion of funds.
“At both the Pension and Health Funds, the Executive Board kept the membership in the dark until the problems were out of control,” said shop steward Tim Sylvester. “Now they point fingers and pass the buck. That’s damage control, not leadership. And a lot of members have had enough.”