July 12, 2007: In June ABF CEO Bob Davidson circulated a letter to all Teamster employees saying that members should dump their Teamster pensions for a company 401(k).
The letter is supposed to be a sales job for the company’s effort to break out of our Teamster pension plans. Instead, it reveals that it would be a disaster for our union to let employers like ABF and UPS to take this course.
An 18-year Teamster wrote Davidson about the company’s proposal. And the CEO’s advice is telling. Don’t worry about losing your pension, Davidson says. Under ABF’s proposal, you would still get your 18-year pension from the Teamster fund—plus start building a 401(k) on top of that pension. It’s “not like Social Security,” Davidson writes, but your very own account.
What Davidson failed to mention is that with 18 years in a pension fund you don’t qualify for anything but a vested pension, which in most Teamster plans amounts to very little.
ABF’s pitch boils down to this: put your future in the hands of the company’s 401(k) and pray that the stock market goes way up. It might work. Then again, the lottery might work, too. You just have to pick that lucky number.
UPS Pullout Could Cause Fund’s Collapse
At least ABF management is up front about their goal: saving the company money on retirement costs. And Davidson is honest enough also to admit what would happen to Teamster pension funds if UPS and ABF pull out.
“A UPS withdrawal, or other adverse factors, would make them even less stable or cause their complete collapse,” Davidson wrote.
Our union needs to say one short word to these corporate schemes: No. The American people have said No to privatizing social security, and we need to tell UPS and ABF the same now, in a strong and unified voice.
The corporate answer is to destroy our Teamster funds to save management money on retirement costs. The union answer is to protect our retirement security by sticking together, strengthening our union funds, and winning benefit improvements.
UPS-Only Plans Cut Benefits
UPS management is pushing their own pension scheme which starts with busting 42,000 UPS Teamsters out of the Central States Fund. Management wants to establish a new UPS-only fund, with half corporate directors and half Teamster officials on the board.
UPS Teamsters don’t have to guess how a UPS-only plan would work. Two large funds exactly like this already exist. They cover all the full-time UPS Teamsters in New Jersey and the New York City areas. Both funds are housed right inside UPS headquarters in Atlanta.
UPS has a track record at these funds—and it should raise alarm for Teamsters concerned about our retirement security.
Management recently demanded big pension cuts in both. They got their way in New York, and slashed pension accrual rates by 30 percent. In New Jersey the union blocked the cuts, so management has pushed the issue before an arbitrator.
The New Jersey fund is only 52 percent funded, by the way. That’s less than Central States. The return on investment in the New York fund was just 3 percent over the past five years and just over 6 percent for the last ten years. That’s much worse than Central States.
These are UPS-Teamster plans just like the company wants to set up for 42,000 Teamsters in the Central States. And they are cutting benefits. This puts the lie to the company’s claim that you would be better off in a UPS-only plan.
Promises are cheap. The results speak for themselves.
The Positive Alternative
Hoffa’s “Best Contract Ever” and the post 9-11 stock market dip delivered pension cuts. But the recent bull stock market has boosted our pension plans and positioned us to win realistic benefit improvements. That should be the priority for this bargaining round at UPS and in freight.
Affordable retiree healthcare. We have an additional 70 cents per hour in benefits due on August 1 in our national contracts. Early bargaining at UPS can let us get a lot more, enough to pay for retiree health care at affordable cost.
A written timetable for improvements in all pension plans. We need a guarantee, in writing, so all Teamsters will know that our pensions will be restored and improved as increased contributions build up in the funds. In 1997, UPS Teamsters got a binding document from Central States before we voted on the contract. We should settle for no less.
Include UPS part-timers in all Teamster pension funds. Part-timers are already covered by Teamster plans in the West, New England and Upstate New York. This will improve pensions for both part-timers and full-timers and be a big boost to the Central States and other funds, bringing in thousands of new participants.
These are realistic goals. There is no reason to give UPS an early deal without them.