March 11, 2009: Many Teamster members are worried about their retirement and want to know more about how their pension works and how they are protected.
In part one of a series of educational articles on Teamster pensions, Teamsters for a Democratic Union collected some of the most frequently asked questions and got answers from pension attorneys and fund managers.
This month, we’ll look at questions from Teamster multi-employer funds. In the next issue of Convoy, we’ll take a look at questions from the new UPS pension fund.
Do you have a question about your pension? We can help. Call Teamsters for a Democratic Union at (313) 842-2600, or email info [at] tdu.org.
Q: Why do some Teamster pension funds pay better benefits than others, even to Teamsters at the same company, such as UPS or YRC?
This is a big question with no single answer. It’s true that various regional (and local) pension plans pay different benefits, sometimes substantially different.
One important element is the degree to which a pension fund has a broad base of participating companies, including in growing or healthy industries. The Western Conference Fund, for example, maintains a broad base of participating employers. The Central States Fund has a narrower base, and is thus more dependent on freight, carhaul, construction, and grocery distribution companies.
A related element is the question of UPS part-timers as participants. This is a young and growing demographic which helps to support a healthy fund. Unfortunately, only the Upstate New York, New England, and Western Conference Funds have UPS part-timers in the fund.
There are a number of other factors in why benefits vary, including: investment strategies, funding level policies, and benefit structures. Pension benefit levels are set by the trustees; half of them are Teamster officials, and half are employers.
To read TDU’s special report on the Pension Divide and to see a comparison between the best and worst-paying Teamster plans, go to www.tdu.org/pensiondivide.
Q: Can my pension be cut?
Yes and no. Your pension future accruals can be cut, and most Teamster funds have cut the accrual rate, which is the amount your pension will go up each year in the future.
Fortunately there is an anti-cutback provision in federal pension law, making it harder to cut already-earned pension credits. Those cannot be cut, unless your pension fund gives you notice that it is in critical status, also called the Red Zone.
TDU has consistently fought to maintain the anti-cutback protection, even when our International Union was fighting to eliminate that good law.
The fact that a pension fund is in the Red Zone does not necessarily mean it will cut already-earned credits; for example, the Central States and New England funds, which are in the Red Zone, have not done so.
Q: What happens if my pension fund goes bankrupt?
This is fairly unchartered water, because generally multi-employer union plans have not failed, as too many single-employer plans have.
The Pension Benefit Guaranty Corporation (PBGC) provides partial benefits to workers from failed plans.
The PBGC is financed by premiums paid by pension plans. Multi-employer plans pay lower premiums because they are more secure.
The PBGC is not nearly big enough to handle the pension crisis facing American workers and retirees: we need a pension bail-out, just as the banks have been bailed out.
Fortunately, while some of our Teamster pension funds are in serious condition, none is on the verge of failure.
Q: Would I be better off with a company pension?
In the great majority of cases, the answer is no. Millions of retirees in company pension plans have had benefits cut.
Multi-employer pension plans, like our Teamster funds, are still the safest bet for a secure retirement. We need to strengthen and defend our union plans, not let companies break our funds up or lure us into less-secure company plans.
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CHIP ANDERSON101 replied on Permalink
Pensions under attack?
After watching the news this last year and 1/2 I find myself trusting no one. AIG? The Bernie guy that Stole Billions of dollars from American people, Now I find my self questioning the motives of recent action taken by the International Brotherhood of Teamsters, at Local 377 in Youngstown, Ohio. I am glad to discover this organization (Teamsters for a Democratic Union) I hope that I have discovered a true group of people that understand the basic fundamentals of a Capitalistic Union. I have been a Teamster since 1978, I started as a young steel Hauler all of those years ago. I am a member of the Union 30 and 1/2 years. I have paid my dues for all of the years that I was a Teamster. What does the term paid my dues really mean? Is it just about sending a check to the union every month? History 101, the answer is clear, pay your dues means do your time with your organization, earn your right to be called a good Brother, help the higher causes in your union walk of life, come in to our house on the ground floor and work your way to the top. We respect race, color, and creed, above all we respect seniority. In most cases seniority protects a worker in the work field in many ways: Many workers pensions are safe because the union forces companies to honor seniority. What would happen if the company that I worked for controlled the pension fund that I have them pay into. In today's world that company would try to change every rule they could to save the pay off they would owe me at the day of my retirement. They would try to do away with seniority. Would we union brothers let them do that? Would we union brothers let them pick and choose who got to work on a day by day basis? READ VINDY.COM>>> Click on local general conversation. >>>>Type in 377 Local Teamsters GET NO PRESS! in the search box. It is mind boggling to see that The International Union has allowed an IBT Attorney to enforce a new Policy that undermines the clear 43 year history of the Local 377 Teamster Construction Hall. The new policy that the Attorney from the IBT wrote looks like a Hiring policy that a company would use; in fact it is a referral policy for a non-exclusive hiring hall. The policy was forced on the oldest drivers working in construction and it took away their promise of being secure in their seniority at the hall. It undermines any chance of feeling a safety net for staying in the construction field, it poses a threat to the brotherhood in that construction Non exclusive hiring hall. For the best picture on the pension threat read Vindy.com as mentioned.Catch Ya Later Friend,Chip Anderson