UPS Wants Control to Keep Lid on Our Pensions

September 27, 2007: As October 1 approaches, the National Negotiating Committee is preparing to cave in to the company's demand to break out of the Central States Pension Fund. Instead of Central States, the company wants to establish a new UPS-Teamster fund where the company would control half of the votes.

The record shows that UPS will use its greater control to keep a lid on benefits and push for pension cuts. That's just what UPS has done in two major Teamster pension funds consisting only of UPS Teamsters: New Jersey Local 177 and New York Local 804.

  • In New York, UPS's trustees pushed through a 30 percent pension cut at the start of negotiations over the opposition of every Teamster trustee. (UPS won the vote by swinging over a union trustee, a machinist official who represents UPS mechanics.) As a result, the accrual rate in Local 804 was indefinitely dropped to $100.80. That's lower than Central States, where the accrual rate is $132!
  • In Jersey, UPS used its control of half the trustees to force its proposal for pension cuts before an arbitrator. If the company gets its way, the pension accrual rate will be slashed by 30 percent to approximately $104, also lower than Central States.

The accrual rate is the amount of monthly pension benefit that you earn or "accrue" for a year of service.

Both the Local 804 and 177 funds are UPS-Teamster funds. They're run out of Atlanta. At each fund, the company names half of the trustees-and then those trustees vote in a bloc to cut Teamster benefits. This is the same structure that is being proposed to "help" Teamsters in the Central States.

Will UPS's Offer Raise Benefits?

To try to win membership approval of their Central States pension grab, UPS will offer a pension increase in their new Central States plan. Before taking the bait, members should look at the company's record and ask what it will mean for the long-term to give UPS half the votes over our pensions.

In the Central States, the accrual rate is guaranteed to go up by a minimum of 8 percent each year. Next year, the Central States accrual rate will be at $143-and in four years, it will be a minimum of $180.

What will happen in the funds where UPS controls half the trustees right now? Will UPS's contract offer provide for guaranteed annual increases in the New York and New Jersey funds? Don't count on it.

UPS has used its voting power in these funds to freeze the accrual rate, push for cuts, and keep a lid on Teamster benefits. That's why UPS is willing to shell out billions to withdraw from Central States: they plan to get it back and more in the future.

It's no surprise that UPS trustees vote in a bloc to save the company money. Knowing that, why would our union give the company more control over our pensions?

Benefits in the Central States need to be improved. There's no doubt about that. The company wants an early agreement. We need to use our leverage to win record contributions that will 1) immediately restore retiree healthcare and 2) provide a roadmap for increasing pension benefits and eliminating penalties for retiring before age 62-without giving in to the company's pension grab.

That's the way to make UPS deliver.

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