Rising Employer Contributions Mean Higher Pension

August 23, 2007: If UPS or ABF or any other corporation says they will do better than a $3,000 pension at 30 years, keep in mind that with the increased funding, that’s not hard to do. The Central States Fund is paying that now—and will be paying a lot more in a few years.

A Teamster under the national contracts, or contracts with similar pension contributions, now accrues $132 per month pension for each year of service. And in four years, that accrual will be at least $174 per month pension for each year of service. And going up each year after that.

Those amounts are only payable in full at age 62, because of the cuts Central States imposed at the beginning of 2004 in 30-and-out benefits. For each year under age 62 that a Teamster retires, that amount is cut by six percent. For example, if you retire at age 58, you have to cut that amount by 24 percent.

So if you retire at 58 this year, you lose 24 percent of that $132 and get $100 for this year. But in four years, you can retire at 58 and accrue about $132, which is 24 percent off of $174.

Timetable to Restore Teamster Benefits

TDU is urging all Teamsters to demand that the trustees of Central States give us a timetable or benchmarks that lead to restoration of unreduced 30-and-out pensions that our union fought hard to win. We should not settle the UPS contract without the immediate restoration of affordable healthcare and a roadmap for eliminating the six percent early retirement penalty.

Our pensions are going up. There is more money going into the fund, lots more. A few years ago the Central States took in $1 billion per year from employers. Now it takes in $1.5 billion and in four years it will reach $2 billion. The assets of the fund are going up.

So if UPS or ABF or any other employer tells you about some great pension they will offer, keep in mind that they may be comparing what they’ll give you in the future to what you can get now in the Teamster pension plan.

UPS’s first pension offer included a $3,000 a month after 30 years of service. In four years, the Central States plan will pay $5,220 a month for a new Teamster who puts in 30 years of service.

We need to be smart, check the numbers and not fall for a corporate sales job—especially with the future of our pension funds and union at stake.

Get Advice Join TDU Donate

Recent News

Yellow Trims Losses: Best Quarter in Six Years

Yellow Corporation released its first quarter financials on May 10. The company shows strong improvement but is still not profitable. Yellow’s overall operating ratio of 99.3 percent is 3 percent better than a year ago, but well below other LTL carriers, including ABF and TForce.


Sysco Profits Up

Sysco Corp announced its quarterly financial report on May 10, with profits and revenue both up dramatically since last year.  Profits for the quarter were $303.33 million, up from $88.9 million last year. Revenue rose 43% from $11.8 billion to $16.9 billion.

View More News Posts