Traffic World: UPS, Pension Fund Set Withdrawal Terms

August 3, 2007: by Thomas L. Gallagher, for Traffic World: UPS reached an agreement in principle with the Central States Pension Fund establishing conditions for a potential UPS withdrawal from the multi-employer pension plan.

The controversial decision to remove 42,000 workers covered under the plan would set the stage for establishing a jointly administered Teamster pension plan for UPS employees. Such an agreement must first gain acceptance by the Teamsters National United Parcel Service Negotiating Committee and ratification by the members.

The Teamsters committee said they will not accept a proposal for UPS to withdraw from Central States unless they are satisfied that it would be in the best interest of all Teamsters who are participants in that Fund, not just the UPS employees.

Specific terms of the agreement have not yet been disclosed.

"While we await official notification of the terms of the settlement, we continue to evaluate the effect on the future of Central States," said James P. Hoffa, chairman of the committee and president of the union.

A dissident group within the International Brotherhood of Teamsters is calling for organized resistance to any withdrawal from the Central States Fund. Teamsters for a Democratic Union said a pension pullout by the union's largest employer would undermine the retirement security of all Teamster members.

The group compared Central States with two jointly administered programs in New York and New Jersey, where UPS has successfully pushed for pension cuts. "Both the New York and New Jersey funds have underperformed compared to the Central States Fund," said TDU in a statement.

Loss of contributions to Central States would also gravely weaken it and endanger the benefits of 100,000 non-UPS Teamster members still covered, said TDU.

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