Southern Locals Paying $1.7 Million for Multiple Pensions

March 25, 2010: Every local in the South is being forced to pay tens to hundreds of thousands of dollars to bankroll big extra pensions for Teamster officials.

It’s a case of misusing union members’ money to provide outsized perks to officials, instead of to build our Teamsters Union.

The locals are paying about $1.7 million this year to the Southern Region of Teamsters Pension Fund, which covers only the full-time officers and staff of local unions in the Southern Region. All of them already are covered by other pension plans.

Tyson Johnson is one of the trustees of the Southern Region Teamsters Pension Fund.Tyson Johnson is one of the trustees of the Southern Region Teamsters Pension Fund.The new fee went into effect three months ago, on January 1, and is 14 percent of the total local union payroll. Here’s how it is affecting some locals:

  • A small local of about 1,000, on a tight budget, is hit for about $25,000 a year.
  • A large local is hit for up to $150,000 a year, enough to hire two organizers.
  • Some locals, such as Georgia Local 528, had to lay off a business agent, so members get less representation.

The local unions apparently have no choice about paying the fee.

In 2004 this fund cut benefits going forward, so the big pay-outs are going to long-time officials who retire and collect a huge extra pension, on top of their other pensions.

T.C. Stone, the former head of Dallas Local 745, got a check for over $1 million from this fund, after he was kicked out of our union in 1997 for signing a sham contract and advancing union funds to himself.

The three Trustees who head this fund are Tyson Johnson, Ken Wood, and Willie Smith, who will each draw a third lucrative pension in retirement.

Due to the 2004 cuts, newer officers and union employees are not going to collect anywhere near as much, and are forced to contribute six percent of their own salary, up to $60,000 per year, to the Fund. So most full-time officials must contribute $3,600 per year and will not receive a fat pension from this fund.

In 1993, Teamster president Ron Carey stopped any further benefit accruals in yet another officers-only pension fund, the Affiliates Plan. He also abolished the wasteful Area Conferences, and their officers-only pension boondoggles. These reforms saved our union some $30 million per year. This Southern Fund was then so well funded—over 200 percent funded—that no contributions were required. Later, under the Hoffa administration, it was depleted.

Our union’s precious financial resources should go toward winning better contracts and organizing to build a stronger Teamsters Union. This kind of waste of dues to buy a rich lifestyle for a few officials has no place in our union.

What do you think? Click here to send your comments to Teamsters for a Democratic Union.

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