Member Action on Pension Pays Off

September 15, 2005: Fighting pension cuts can make a difference. That’s the lesson coming out of New England where angry Teamster members pressured the New England Pension Fund Trustees to backtrack on pension cuts they announced in July.

“I was featured in Convoy after I learned that the pension cuts were going to make it impossible for me to retire in November like I planned,” said Local 42 member Dan Faust, who is just a few months short of 30 years of pension credit “The next thing I know I got a call from my local officer and she told me the trustees had made changes because of all the fallout and I would be able to retire.

“I’m not saying it was all about that one article. The trustees heard from a lot of Teamsters who were furious and we won some positive changes as a result. I’m riding on cloud nine right now,” Faust said.

The news is not all good. For most Teamsters, the restrictions on 25-and-out and 30-and-out pensions before age 57 remain in place. New England Teamsters who did not have 25 years of credit by July 31, 2005 will not be eligible for their full special-service pension until age 57. Even if you had 25 years of credit by July 31, you will not be eligible for a Plan D special-service pension (30-and-out at $3,500/month) until you are at least 57.

“A lot of good Teamsters are still being hurt by these cuts and they are furious—and rightfully so,” said Faust. “Members understand that action has to be taken to protect our pension funds over the long term. But it shouldn’t be on the backs of hard-working Teamsters who have sweated all their lives to put money into these plans.”

Improvements Won

Under the original changes, Teamsters with 25 years who continued working after July 31 would have their pension frozen until they reach age 57. Then, at 57, the pension would snap back to the full rate. A member who had to retire before 57 because of injury or the closure of their company would get no additional benefit for their extra time worked.

The trustees have now eliminated this “snap back” provision. If, and only if, you had 25 years on July 31 and were eligible for a special-service benefit, then you will continue to earn the additional $150 per year or get to the 30 year/$3,000 benefit and be able to retire at any age. However, UPS, freight and other Teamsters working under a Plan D contract cannot receive their maximum benefit unless they wait until 57 to retire.

In a second victory, the trustees reversed a rule change that would have cut the pension accrual rate of all members covered by already-negotiated contracts that did not include annual increases in their pension contributions after July 31, 2005. This would have meant pension cuts for many New England Teamsters covered under multi-year contracts that were negotiated before the pension rules were changed.

Now, the Pension Fund will honor all existing contracts by maintaining the negotiated and promised accrual rate. When these contracts expire, the new contracts must include increased pension contributions of five percent a year to maintain the accrual rate.

More Changes Ahead?
The quick reversal on the part of the trustees raises disturbing questions. If the fund could afford the new revisions restoring some cut benefits, then why were the cuts made in the first place? Exactly what information were the trustees looking at or not looking at prior to making the cuts in July?

As Convoy goes to press, the fund still has not put out anything in writing about the rule changes, fueling speculation that more changes may be coming. Many members say these rule changes don’t go far enough. It remains to be seen whether membership pressure can convince the trustees to introduce stronger grandfathering provisions.

Accountability Needed

Teamster members and officers have won some improvements already by putting pressure on the pension fund trustees.

This success is an example of how our union trustees on the pension fund are indirectly accountable if we apply enough heat. What is really needed is direct accountability.

The New England pension cuts show the need for us to elect delegates to the 2006 Teamster Convention who will support changes to the Teamster Constitution to hold benefit fund trustees directly accountable to Teamster members—and to support candidates for International office who will defend our pensions from attacks by the employers and corporate politicians.
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