September 11, 2009: YRC is saving $40 million per month by not paying into any Teamster pension fund on its 35,000 Teamster employees. This concession is aimed at keeping YRC afloat, and its hard-working drivers, dockhands, mechanics and office workers on the job.
But that same saving for YRC means a $500 million annual deficit in payments to Teamster pension funds. Some, like the Western Conference Fund, can absorb the loss because of a good funding level and because YRC represents a small fraction of that fund’s income.
Some other funds are being badly hurt. The Central States Fund is heavily dependent on YRC’s contributions, because the International Union let UPS pull out in December 2007. With YRC not contributing, Central States’s annual employer contribution stream now stands at $702 million per year, but its benefit pay-out stream is $2.734 billion per year.
That means Central States takes in $1 for each $3.89 it is paying in benefits, and must make up the difference on its investments, which is highly unlikely.
Some smaller pension funds in the East are also heavily hit by YRC’s temporary withdrawal from pension funds, such as the New York Local 707 fund and the Baltimore Local 557 fund.
Thus the YRC concessions, which are designed to save jobs, also are putting some Teamster pension funds, and future Teamster retirees, in a world of hurt.