For the last two months, I can’t get any of my grievances on excessive OT paid. My BA is waiving the penalty pay and taking a promise from the company that it won’t happen again. I think he’s trading away my grievances. Is there anything I can do?

- Not Horsing Around

March 27, 2008: What’s in store for Teamster pension funds under the Pension Protection Act?

Members will start to learn more this month when some Teamster plans officially enter the Yellow Zone and Red Zone.

Hundreds of thousands of Teamsters will get reports this month on the funding status of their pension fund.

These funding notices are required by the Pension Protection Act (PPA) of 2006 which went into effect on Jan. 1—and some of them will have scary news.

Pension plans that are less than 80 percent funded—and that includes a number of Teamster pension funds—have to officially notify participants that their fund is in the “Yellow Zone” (Endangered) or the “Red Zone” (Critical Status).

Some Teamster funds are considering new pension cuts—including the New England Pension Fund, the third largest plan in the Teamsters.

Some pension plans have already implemented belt-tightening. Others will not have any need for pension reductions.

Not all Teamsters will be getting funding notices—and not all funding notices will reveal what cuts, if any, are being considered.

The law requires most Teamster funds to send out notices by April.

But these funding notices do not have to reveal what actions the pension fund will be taking.

Funds in the Yellow Zone or Red Zone have to put together a plan to improve their funding.

But that plan, which may include cuts in pension accruals, does not have to be finalized for seven months after the funding notice. That’s December for most for Teamster funds.

In the meantime, some Teamster funds are moving quickly to implement cuts without consulting or even warning the members.

It will be up to Teamsters who are concerned about their pensions to get informed and get involved. Teamsters for a Democratic Union is here to help.

Read more about pension issues in our union in this month's issue of Convoy Dispatch:

• New England Pension Fund Plans More Cuts
• New Jersey Local 641: Pension Act Delivers Pension Cuts
• The Pension Protection Act: What It Means for You
• Local 355 Pension Cuts Accrual to Zero
• Hoffa Lies Again About ‘No Pension Cuts’
• Central States Fund in the Red Zone

March 27, 2008: The third largest pension fund in the Teamsters Union is reportedly planning new benefit cuts.

Employer and union trustees at the New England Pension Fund reportedly disagree about what kinds of cuts are needed and are debating different proposals.

As Convoy Dispatch goes to press, Teamster members in New England have not been informed of these developments by the fund or its union trustees.

In fact a Special Notice about the Pension Protection Act on the fund website says that, “No changes to the Fund...are currently under consideration.”

In 2005, Teamsters in New England were hit with pension changes without any warning—including the establishment of a minimum retirement age of 57. An uproar from angry members convinced the trustees to make small improvements that protected some members’ pensions.

Under the Pension Protection Act, the New England Pension Fund does not need to adopt any funding plan until next year. It may be prudent for the fund to act more quickly.

But don't the more than 75,000 working Teamsters and retirees covered by the fund deserve to be informed about what is happening to their pension fund and their retirement?

The fund could start by posting an accurate Special Notice on its website, sending a mailing out to members and holding pension meetings at Teamster locals covered by the fund where members can hear from the union trustees on the fund.

“Members have the right to know what benefit cuts our Teamster trustees are discussing with the employers,” said Dawn Stanger, a Local 597 Teamster. “If there are problems with the fund, give it to us straight. We shouldn’t be kept in the dark when our retirement is at stake.”

March 27, 2008: How many times have officials in the Hoffa administration sold a contract by promising—in writing—that Teamster pensions will be “maintained and possibly improved,” only to turn around and deliver pension cuts?

Hundreds of thousands of Teamsters went through this routine before. Now Hoffa is at it again.

In March, 8,000 DHL Teamsters received a bulletin in the mail selling a contract deal. It states:

“The amount [negotiated in the deal] is sufficient to maintain and possibly to improve existing health and welfare and pension benefits.”

It is even underlined and signed by James Hoffa. It’s gotta be true, right?

Wrong.

Ask the DHL Teamsters in Baltimore. Their officials just voted to cut their pension accrual to zero. Work all year, get nothing added to your pension credits.

Ask the DHL Teamsters in New England, where pension cuts are coming.

A wise old saying: fool me once, shame on you; fool me twice, shame on me.

Teamster members need to stop being played for the fool by top officials who enjoy millionaire pensions.

March 27, 2008: Teamsters in New Jersey Local 641 were hit with major pension and health and welfare cuts on March 10—just nine days after the Local 641 pension fund announced it was in critical status (the “Red Zone”).

Effective June 1, the pension accrual will be slashed to one percent—the lowest amount allowed for plans in the Red Zone. The minimum retirement age was raised to age 57 with stiff annual reductions for pension benefits for Teamsters retiring below the age of 62.

Under the Pension Protection Act, Local 641 did not have to classify their fund in the Red Zone until June and did not have to adopt a plan or implement any cuts until June of next year.

The fund acted on a much accelerated pace—which may be financially prudent. But coming without any warning, the announcement blindsided members and left some Teamsters scrambling before the June 1 deadline when the changes take effect.

The Local 641 Welfare Fund also introduced major cuts to in health benefits for both working Teamsters and retirees.

Members were informed of the benefit cuts at a March 9 general membership meeting and through a notice from the fund dated March 10.

The cuts in Local 641 reveal how quickly Teamster funds may move in some cases to reduce benefits, now that the Pension Protection Act is in effect—and serve as a warning to Teamsters to get informed now.

A Warning from Local 641

“We were broadsided when pension cuts were made in my local with no warning. I feel like I was slapped in the face. Some drivers on my job are scrambling to retire now before the cuts take effect in June.

“My advice to all Teamsters: Don’t wait for the other shoe to drop. Ask questions now. Don’t let what happened to us in Local 641 happen to you.”
John Roncinske, Yellow, Local 641, Union, N.J.

April 18, 2008: “‘Red Zone’—Why it is better than the ‘Yellow Zone’”: That’s the surprising headline that appeared in a newsletter issued by the Central States Fund in March.

Most pension funds want to stay out of the Red Zone. But Thomas Nyhan, the director of the Central States Fund, told union officials last December that he wanted to steer the fund’s documents so that it would end up in the Red Zone. Now he has.

Nyhan says that being in the Red Zone is advantageous in the case of Central States because it will allow the fund to chart a longer period—beyond ten years—to bring its funding level up to a high level.

Central States Teamsters should not be faced with any further pension cuts, however. The fund already has lowered the accrual rate to one percent—the lowest allowable for a plan in the Red Zone.

A one percent accrual means that each year a Teamster increases their monthly pension amount by one percent of the contributions for that year.

The accrual rate in 2008 for a freight Teamster who works all year will be $136.

Click here to read "What Does the New Pension Law Mean for Your Benefits?"

March 27, 2008: In April, hundreds of thousands of Teamsters will be getting a report from their pension fund on its funding status.

A new law, the Pension Protection Act (PPA) of 2006, requires that these reports be mailed to members that participate in pension plans that are less than 80 percent funded.

Get the facts on your funding notice and what your pension plan’s funding level could mean for your benefits.

What information will be in the April funding notice?

Most participants—Teamsters and retirees—in Teamster pension plans will get a notification of their plan’s funding status in April.

These notices will contain a lot of technical terminology, but basically will reveal whether the plan is well-funded (in the “Green Zone”), endangered (“Yellow Zone”) or in critical status (“Red Zone”).

This determination is based on the funding ratio and also whether the fund anticipates a situation in the next 5 to 7 years in which more would be paid out in benefits than is coming in from employer contributions and investment earnings.

Will all Teamster funds send out notices in April?

Most will. The PPA requires all funds to send out a notice within 120 days of the end of their fiscal year. The fiscal year for most Teamster plans runs from Jan. 1 to Dec. 31. So the 120-day deadline falls at the end of April.

But some Teamster plans set their fiscal year differently. The New England Fund is on a Oct.-Sept. fiscal year so they are not required to send out a funding notice until next January.

The Local 710 fund’s deadline is May. The Local 688 plan’s notices do not have to go out until September.

Will the notice tell me whether the plan will be making cuts or improvements?

In most cases, no. Some Teamster plans may issue statements at the same time saying what they are planning or what they anticipate in the future.

Does it mean there will be pension cuts if a fund is in the Yellow or Red Zone?

No. Being in the Yellow Zone or even the Red Zone does not mean there will necessarily be any benefit cuts.

For example, the Central States Plan has already cut the accrual rate and made a rule that employer contributions must go up by eight percent per year. The director has stated that there will be no further cuts.

All funds that are in the Yellow Zone or Red Zone must adopt a plan to improve funding over a specified period of years (normally more than 10 years) to reach specified levels of funding.

A Funding Improvement Plan or Rehabilitation Plan does not need to be adopted until Dec. 1—and even later in some cases. These plans must go into effect by next year.

Some funds are acting more quickly and implementing cuts ahead of schedule—without any prior notification or consultation with Teamster members.

Who makes these decisions?

The fund trustees do. Half of the trustees are appointed by the union, and half by the employers. Teamster leaders control 50 percent of the votes and have a lot of power over the fund, if they choose to use it.

Can the trustees cut benefits that I have already earned? Can retirees’ benefits be cut?

Retirees’ benefits cannot be cut. In most cases, it is also illegal to cut pension credits that working Teamsters have already earned. There is an exception for funds in the Red Zone: they could cut some already-earned benefits of Teamsters who are not yet retired. Hopefully this extreme case will not come to pass.

How can concerned Teamsters have a voice in these decisions?

First, we can get informed.

Under the Pension Protection Act, our pension funds are required to provide unprecedented information to members, including actuarial valuations and financial reports. The right to this information was won after a lobbying effort by Teamsters for a Democratic Union and the Pension Rights Center.

Now TDU is assisting members in acquiring this information from their pension funds.

Second, we can demand accountability from our union trustees.

Teamster members should not be blindsided by pension cuts. Our union officials that serve as pension fund trustees can and should report to members on what cuts, if any, employer trustees are proposing, what union trustees are counter-proposing, and how working Teamsters can be affected by the options being considered.

These funds belong to working Teamsters. It’s our money. We have the right to be in the loop about the decisions that are being made about our retirement.

March 27, 2008: Teamsters in New York Local 804 will vote this month on bylaws changes that will put more pension and contract information in the hands of the membership.

The first bylaws change will require the Local 804 Executive Board to include a report on the Local 804 benefit funds at every general membership meeting.

For ten years, the Local 804 pension fund earned dramatically substandard investment returns—resulting in a $100 million shortfall in the fund. But members never knew a thing about it.

The fund’s poor investment record and $378 million overall funding shortfall only came to light when some Local 804 Teamsters obtained a leaked copy of a pension fund actuarial report. By then, the fund had voted to cut the pension accrual by 30 percent.

“During the last contract, we were hit with a lot of propaganda from the company about our pension and very few members really felt like we had the facts. Having reports at our meetings will help members know what is happening with our fund so we can act as watchdogs when we have to,” said Chris Sabatino, a package car shop steward.

“Informed members mean a stronger union and stronger pensions, and that’s our goal,” Sabatino said.

A second change mandates Local 804 to set up a Contract Committee to inform and mobilize Local 804 members when a new contract is being negotiated.

When members were kept in the dark during the last contract, they launched the Local 804 Make UPS Deliver network.

The network held meetings, issued contract bulletins and led a Vote No campaign that defeated a weak contract recommended by both UPS and Local 804.

By voting No by a nearly three to one margin, Local 804 members won a new contract that restored their pensions without giving in to the company’s demand to eliminate 25 & Out pension benefits for new employees.

“UPSers remember 1997 and we know that we win better contracts when members are informed and not kept in the dark,” said Ken Reiman, a package car driver in Melville, N.Y.

“We don’t want another weak contract like this last one. By itself, voting Yes on this bylaws change won’t win us a good contract, but will send a message about what members want our union to do the next time we’re in negotiations.”

March 27, 2008: Before the new contract took effect, and with thousands of Teamsters still laid off, Yellow, Roadway and USF Holland started advertising for $14 per hour casuals. YRC management has made no secret of their intent to make use of the contract language that allows for the influx of part-time dock workers at the low rate.

With respect to laid off Teamsters, it’s important to check the language for your supplement. The Central States Local Cartage, Article 61, Section 1 states “…four (4) hour casuals may be used to supplement the regular workforce if all available regular employees at the applicable Employer facility are working or scheduled to work.”

March 27, 2008: As we go to press, the International Union has reached a tentative agreement for a national contract at UPS Freight. UPS Freight Teamsters will get to vote on the new contract, and they need to take a close look at the agreement and make an informed choice.

All Teamsters can be proud of the impressive organizing taking place at UPS Freight. These brothers and sisters are joining our ranks to ensure a better future for themselves and their families. That future will be determined first and foremost by the negotiated contract.

The Indianapolis contract has been in place now for some months. What improvements can be made on it? With our union now bargaining for over 9,000 (and growing) UPS Freight Teamsters, we’re a lot stronger than during the initial Indy bargaining.

Having a strong at UPS Freight is crucial for building a strong future for all freight Teamsters.