The Teamster Benefit Divide

July 1, 2010: Hoffa let UPS pull out of the Central States and gave UPS Freight a free pass on paying Teamster benefits.

Now Teamster members are paying the price.


See how your pension stacks up on the Benefits Comparison Chart

Teamster members are paying a high cost for the pension concessions negotiated by the Hoffa administration.

Hoffa’s decision to let UPS pull out from Central States saved the company billions. It also locked tens of thousands of Teamsters into a substandard pension.

Big Brown saved millions more when Hoffa gave UPS Freight a free pass on paying Teamster benefits—a move that undermined YRC and ABF and further weakened union pension funds.

UPS was making record profits when Hoffa gave the company these historic concessions. Three years later, where do we stand?

  • The UPS Pension Plan pays the lowest pension benefits to UPS Teamsters in the country—delivering substandard pensions to nearly half of all full-time UPSers.
  • Weakened by UPS’s withdrawal, the Central States Pension Fund could become insolvent in 10 to 15 years.
  • Emboldened by the concessions, UPS and other Teamster employers are looking for new ways to reduce their benefit costs—which will lower Teamster pensions and increase the benefit divide.

Teamster pensions are at a crossroads—and the next few years will be critical to the future of our retirement security.

Will our union execute an Action Plan to win good, secure union pensions—and strengthen benefit levels across the board?

Or will UPS and other employers continue to slash their benefit costs while working Teamsters pay the price?

Pension Divide

The Pension Comparison Chart shows the range and variation of benefits of the great majority of pension plans covering UPS Teamsters.

While this information pertains to UPS Teamsters, most of these funds cover other Teamsters as well. The cost of an employer takeover of Teamster pensions is clear.

By the end of the contract in 2013, thousands of UPS workers in Teamster plans will be eligible for 30-and-out benefits in the range of $4,000-5,000 per month.

Teamsters in the new UPS plan will get just $3,000 a month.

The UPS plan covers 44,000 Teamsters in the Carolinas and the Central and Southern Regions—nearly half of the company’s full-time workforce.

Teamsters Pay for UPS Savings

UPS paid $6 billion to pull out of the Central States Pension Fund. But the company will make up those billions—and save billions more—by paying lower pension benefits and making smaller pension contributions into the company plan.

UPS and the International Union officials keep it secret from the members exactly what the new UPS plan costs the company. But it is less than half of what the company has to contribute to union plans.

If a Teamster in the UPS plan works temporarily for a union, the union only has to pay $25 a day to maintain that member’s pension contributions. That’s $3.12 per hour—compared to hourly contributions of $7 to $8 an hour in Teamster funds.

No wonder Teamster plans pay superior benefits! In all, UPS is saving more than $450 million a year through reduced contributions.

Those savings will increase every year, especially if UPS is able to keep pension benefits for half of its workforce at a substandard level.

When the UPS contract comes up for negotiation in 2013, management’s UPS Plan, with its $3,000 a month benefits, will be their benchmark to try to lower their costs and our benefits.

Action Plan for Strong Pensions

Teamster members want good pensions and they want pension security. Our union needs an Action Plan to achieve these objectives.

We need to draw the line against employers pulling out of our pension plans—and to organize new employers into Teamster funds. Hoffa’s decisions to let UPS pull out of Central States and to allow UPS Freight to stay out of Teamster funds are monumental mistakes that can’t be repeated.

We need to step up the fight to win federal legislation to protect the earned pensions of all workers. This will bring a good measure of security to Teamsters in the Central States Fund, which is in trouble in part due to the UPS pull-out.

And we need to go on the offensive in bargaining to secure the good pensions, with early retirement, that Teamsters need and deserve.

The future of our pensions and Teamster retirement security is on the line. We need a new direction and a plan to win.

matt taibiRace to the Bottom
“In our last contract, Hoffa’s concessions saved UPS billions in pension costs. 

“But instead of delivering pension security to UPS Teamsters, it created a pension divide.

“We need to bring everybody up or management is going to pit us against each other in a race to the bottom.”

Matt Taibi, UPS, Local 251, Providence

We Did Our Part
“When it comes to our pensions, we’re fighting to preserve what we already earned.

“With every contract, we took a lot less in wage increases to free up money to cover our pensions.

“We did our part. Now, we need our union to protect the pensions we earned.”

Tim Pagel, YRC, Local 988, Houston

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