Anyone who thinks that congressional votes, federal regulations and the machinations of Wall Street have no bearing on their day-to-day lives should talk to John Raffiani Sr.

The Greene County resident is getting a hard lesson in what could be called the downside of deregulation, the decline of unions and the lingering effects of the 2008 recession.

He's one of at least 50 retired Capital Region truck drivers facing a deep cut in their monthly retirement checks due to looming shortfalls in their union pension funds.

The cuts will be allowed thanks to an amendment that was tucked into the most recent federal budget, which was approved by Congress and signed by President Barack Obama in December.

About 100,000 New Yorkers who depend on a variety of private-sector union pensions could be facing lowered payments in coming years.

And while the pension fund that Raffiani relies on, the Teamsters' Central States Pension Fund, is the most prominent and most threatened pension fund right now, the amendment opens the door for potential future cuts to an estimated 10 million retirees nationwide who are enrolled in "multi-employer" pension plans.

Raffiani and others want to know how such a measure was folded into the larger budget rather than debated on its own. "I worked hard for 35 years," said the 68-year-old. "I paid a lot of money over time into that fund."


Raffiani was a Teamster "car hauler," a truck driver who specialized in transporting new cars to dealerships around the Northeast. 

Everyone has seen them — the big rigs with double-decker trailers laden with shiny new vehicles.

In the trucking world, this is an elite group: Drivers not only deliver the valuable cars, but they need to get them on and off their trailers without a scratch. Raffiani and his fellow drivers transported cars from the vast rail yards in Selkirk to dealerships across the region.

He was enrolled in the Teamsters' Central States Pension Fund, which has more than $17 billion in assets. Despite that, a confluence of trends threatens the fund's long-term solvency.

Since the trucking industry was deregulated in 1980, there have been fewer big companies paying into the plan, and even fewer union drivers contributing to the fund. Add in the lingering hit from the 2008 financial crash and the plan, which now pays $4 in retirement funds for every dollar it's collecting, is facing long-term peril.

As a result, the fund's managers sought and got permission from Congress to make the cuts if needed.

Raffiani says his approximately $3,000 monthly pension could be cut almost in half.
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It should be a while before that occurs, according to the union, but most expect it to happen by 2016.

Raffiani got into the car hauling business almost by chance, and he stuck with it as he gained experience and seniority.

He began driving concrete trucks after high school, but that was seasonal. When he got the chance to haul cars, he jumped.

In his best years, Raffiani earned more than $50,000 with benefits. Some drivers made twice that if they were willing to drive all the time and spend weeks away from home.

It was never easy, though. As well as driving for 10 hours at a stretch, car haulers have to load the new vehicles on their trailers, then chain them securely in place. It can take a few minutes or few hours, said Raffiani, depending on the vehicles. The job also requires clambering around a double-decker trailer in all kinds of weather, day and night, using heavy steel rods or tie-down bars to secure the chains holding the cars.

"The bars do a number on you," Raffiani said, adding that all the fellow car haulers he knows have chronic shoulder problems. "That bar could slip and knock out your teeth."

He remembers the time another hauler lost four fingers when a rod slipped in a particularly bad way. 

Another driver died after he was pinned between two cars he was unloading in Newburgh. A Canadian hauler slipped off his trailer one frigid night near the border and landed on his head.

Raffiani considers himself lucky: He got out with the usual shoulder pain and only three hernia operations.

He traveled mostly in New York and New England, although some trips took him as far as Montana and Oklahoma.

Shortly after he started in the business, he noticed an odd phenomenon to which he didn't give much thought at the time.

The companies that had contracts to haul cars seemed to be endlessly changing, especially after deregulation. 

They were being taken private or public. Or going bankrupt and reorganizing under different names or owners.

Raffiani has a hard time keeping all his employers straight — many don't exist any more, or have gone through numerous iterations.

He started his career with Anchor Motor Freight and then went to Leaseway. Then it was NuCar. After that he was at M&G Convoy, Automobile Transport and Ryder, and so on.

Some of the firms didn't seem well-managed. He recalls one that got a contract with an unusually low bid — it turned out the Georgia-based owners didn't realize there are road tolls in New York and New England. "Right away, they were in serious trouble," he said.

In retrospect, the game of musical trucks resulted from deregulation. Prior to the 1980s, car hauling was governed by strict federal rules about where trucks could or couldn't go. That limited the competition. Deregulation, especially the Motor Carrier Act of 1980, meant more and more people could enter the business. That may have helped lower shipping costs, but with an ever-expanding list of companies, the pay for the drivers fell and union shops became less competitive.

"Pretty much anybody could haul what they wanted when they wanted to,'' said Raffiani.

For pension funds like the Central States, which has 411,000 members, one result was that fewer and fewer drivers are paying into the plan. Currently, Central States has just one active employee for every five retirees.

Raffiani isn't sure how many fellow retirees know about the looming cuts. He's been trying to get the word out and has spoken with groups like Teamsters for a Democratic Union, which has criticized the union's leadership on this issue.

The Washington, D.C.-based Pension Rights Center is keeping track of the possible cuts and they are pushing the union to keep searching for alternatives.

AARP has sounded the alarm as well, saying they are worried about the precedent it could set.

Some criticize the way the amendment, which was pushed through by Republican Rep. John Kline of Minnesota and Democrat George Miller of California, was inserted into the larger budget bill. They say that had it been a stand-alone measure, there would have at least been more debate.

"Because it was attached to what many viewed as 'must-pass' legislation, many believe there was no choice," said Joellen Leavelle, outreach manager for the Pension Rights Center.

"Whether or not they even knew what they were voting for is another story," Raffiani said of the lawmakers who voted for the overall budget package.

In the aftermath, Raffiani is considering his options. He has renewed his hazardous materials license, which would allow him to drive a fuel truck — at his age, he doesn't want to climb around on car hauler trailers. He drives a school bus part time and refurbishes vacuum cleaners on the side, and thinks about ramping up that business.

He's also looking at opening a small cafe with his wife, who he says is a top-notch cook.

Raffiani has two children in the area, including a son who joined the Air Force years ago. He's already retired with a secure government pension in Georgia, where heating costs and taxes are fraction of what Raffiani pays.

"I've been sick ever since this happened," Raffiani said.

Last summer Teamsters for a Democratic Union raised the alarm that President James Hoffa was coming after rank and filers’ right to vote for the union’s top officers. Now TDU is celebrating a win: the right to vote will be permanently enshrined in the Teamster constitution.

That’s the central provision of a settlement agreement the U.S. government and the Teamsters announced January 14—replacing the 1989 consent decree as a way to monitor for corruption and enforce member control of the union.

The news comes as Teamsters gear up for a hot union election in 2016.

“I am cautiously optimistic,” says Frank Halstead, a Los Angeles grocery warehouse worker and TDU member. “We’re starting early, putting together a coalition slate, trying to get people to focus on what we agree on… And one thing we all agree on is that Hoffa has to go.”

Thousands of members had signed TDU’s petition urging the court to protect the right to vote. Judge Loretta Preska will hold a hearing February 11; she is expected to approve the permanent settlement hammered out between the U.S. Attorney and the union.

DEMOCRACY IS POWER

The right to vote for Teamster national officers was TDU’s idea in the first place—a democratic alternative to government control of the union’s operations.

In the ’80s the Teamsters had ties to organized crime, and the government investigated the union for racketeering. To avoid a trial and possible federal trusteeship, the brass reluctantly accepted the consent decree: a deal that included direct elections for the union’s top seats, fair election rules including an independent supervisor, and an Independent Review Board to investigate charges of corruption, from locals on up.

Up till then, Teamsters officers had been elected by delegates at a tightly stage-managed convention—generally with near-unanimous votes. That’s still the way it still works in most of the largest U.S. unions.

But in the Teamsters’ first-ever direct election in 1991, members voted in an opposition slate headed by Ron Carey—and the change breathed new life into the union. His administration worked to activate the rank and file, and reversed declining numbers with new organizing.

Undoubtedly the highlight of the Carey years was 1997’s 15-day, nationwide strike at UPS, under the banner “Part-Time America Just Won’t Work.” The strike captured national attention and scored one of labor’s biggest victories in decades, forcing UPS to combine 20,000 part-time jobs into 10,000 full-time jobs.

Carey was removed from office in 1998 over campaign finance allegations, though he was later acquitted of all criminal charges. His successor Hoffa has been president every since—presiding over the loss of much of what members had won.

Part-time jobs, for instance, have proliferated again at UPS. In freight, the union has failed to organize and has let its once formidable power erode, recently accepting serious pension concessions.

In grocery, “these multinational, billion-dollar corporations are just grinding workers to the ground because of unreasonable productions standards, and the international provides no assistance,” says Halstead.

“People are realistic,” he says. “They’re not looking for someone to ride in on their white horse and save the day.

“But our members are our most valuable asset, and they don’t get utilized in strategy or planning. Our current leadership spends its time placating the company, and shuts our members out of the process completely.”

WAVE OF ANGER

TDU has run vigorous challenges every five years, but so far hasn’t been able to topple Hoffa. TDU-backed Tom Leedham won at least 35 percent of the vote three elections in a row (1998, 2001, 2006).

Last time around, in 2011, Hoffa’s opponents scored 41 percent of the vote—split between TDU-backed Sandy Pope and another challenger, former Hoffa ally and international Vice President Fred Gegare.

But now after a wave of anger at concessions the union forced on unwilling members in its national contracts—most notably at UPS—some of the administration’s big opponents are teaming up.

The Teamster constitution gives members the right to vote not only on national contracts, but also on any local supplements and riders. The national contract doesn’t go into effect until all the supplements are ratified. (This 1991 provision was another TDU win.)

Members have used this right to stop concessions in their local agreements—and to win gains. For instance, when the 7,000 UPSers in Local 804 in New York City held up their national contract by voting no in 2008, they stopped the company from eliminating their 25-and-out local pension.

At the end of the latest bargaining in 2013, though members narrowly voted to approve the national deal the union had reached with UPS, they rejected 18 of the 28 local supplements, covering 63 percent of members. UPSers were angry at the deal’s givebacks, especially an increase in employees’ out-of-pocket health care costs, and its failure to address the proliferation of part-time work, coerced overtime, technological surveillance, and supervisory harassment.

The union’s argument, TDU National Organizer Ken Paff said, was that the insurance is still pretty good, compared to what the nonunion majority gets. “But what was interesting was that argument got no traction,” he said. “People said, ‘we work at UPS, we work like dogs, they’re making profits hand over fist—we want no concessions.’” UPS made $4.4 billion in profit in 2014.

The union went back to the table and improved the health care a bit, but focused greater energy on pushing members to approve the deal. When Teamsters continued to hold out in Philadelphia, western Pennsylvania, and Louisville, Kentucky, the union’s national officers simply declared they had the right to impose the contract—and did so.

OPPONENTS TEAM UP

In the 2016 race, it looks like Hoffa will face off against a TDU-backed coalition slate that unites local leaders including Fred Zuckerman, who ran for vice president on Gegare’s slate last time, with Pope and Local 804 President Tim Sylvester. (The coalition hasn’t yet announced any candidates.)

Last weekend 125 Teamsters turned out to a Los Angeles meeting to hear Zuckerman and Sylvester speak.

Zuckerman is president of Local 89 in Kentucky, the biggest UPS local and a center of resistance to the contract. Despite pressure from the international and the company, members voted their local rider down twice, by overwhelming margins.

Sylvester’s local also drew national attention for its militancy last year when 250 package car drivers in Queens walked out to protest an unjust firing—and were all fired. Local 804 ran a public campaign that got the firings reversed.

Challengers will get a boost from at least one improvement to the election rules. Starting with 2016, the settlement agreement provides, each candidate will get a free mailing to members a week before the election.

Though mail’s no substitute for an army of grassroots volunteers, you also can’t expect to reach a million members personally. So the mailing could be a big deal. In past elections the cost has deterred TDU-backed candidates from mailing at all—while Hoffa has sent out multiple glossies.

BALLOT HURDLE

On the flip side, TDU didn’t get everything it wanted in the agreement. One worrisome change affects the threshold for getting onto the national ballot.

At present candidates for national office must gather 50,000 member signatures to become accredited, then win at least 5 percent of convention delegates to be nominated. To avoid competition, the current administration has been keen to raise the figure to 10 percent of delegates.

That’s a tougher threshold than it might sound. “Incumbents have a tremendous advantage in the delegate elections,” Paff says.

Local officers beholden to the international union leadership often run unopposed in delegate elections. When they do face opposition, they have financial and strategic advantages over rank and filers. And at the convention itself, delegates are pressured to back incumbent leaders.

Leedham, for instance, garnered just 7 percent of delegate votes for his nomination, but won 38 percent of the popular vote. Carey got only 14 percent of delegates—then won the election.

The agreement delays the pain. It provides that the 5 percent threshold will be maintained through the 2016 and 2021 elections. But after that, delegates may vote to raise the bar.

The union will also gain power to appoint the people charged with monitoring it for fairness. The three-person Independent Review Board—presently one member is appointed by the union, one by the government, and one jointly—will be replaced by one investigating and one reviewing officer, eventually both to be appointed by the union’s executive board. The union will also get to appoint its own election supervisor—presently jointly nominated and court-approved—beginning with the 2021 election.

These impending changes ramp up the urgency for the challengers.

“It just makes it all the more important that we win this time around,” Halstead says, “because if we don’t take advantage of this opportunity, Hoffa’s going to do everything he can to make sure we never have this chance again.

Driver turnover remained at elevated levels for truckload fleets of all sizes, inching up one percentage point to 97% at larger carriers and remaining at 94% at smaller fleets, American Trucking Associations reported.

The numbers compared to the second quarter of last year showed sequential stability in both the truckload fleets with revenue of more than $30 million and those with revenue below that benchmark.

Click here to read more at Transport Topics.

The International Brotherhood of Teamsters has placed its local at Sikorsky Aircraft into trusteeship, accepting the recommendation of an independent review that found a systemic lack of financial controls that investigators said resulted in thousands of dollars being embezzled by a former president.

The union's failure to adequately document expenses also led to millions of dollars being spent without approvals from the executive board or members of the Local 1150, and tens of thousands spent on meals and personal expenses, according to a report from the Teamsters Independent Review Board.

Click here to read more at The Hartford Currant.

YRC Freight is looking to increase its use of purchased transportation to increase its profitability, according to a leaked internal memo.

A Dec. 18, 2014, memo obtained by theKansas City Business Journal, details a change-of-operations request to the International Brotherhood of Teamsters that would allow the company to increase its use of interline carriers — third-party transportation providers — in areas currently served by YRC Worldwide Inc.employees.

Click here to read more at Kansas City Business Journal.

Members of Teamsters Local 399 have approved a new contract, avoiding a strike that would have shut down commercial production in Los Angeles.

Location scouts, animal wranglers and drivers on Saturday ratified a revised contract negotiated Tuesday between the union and the Assn. of Independent Commercial Producers.

Click here to read more at the Los Angeles Times.

When Sandra Presley’s husband died four years ago, the couple’s retirement income from decades of working for trucking companies dropped by over half.

After missing millions of deliveries on Christmas in 2013, United Parcel Service Inc.(UPS:US) promised it would do better next time. It hired thousands more workers to ensure it could handle a deluge of shipments on its busiest days.

The improvements worked, maybe too well.

Click here to read more at Businessweek.

If you weren’t paying close attention to happenings in our nation’s capital around the holiday season - and who could blame you - this might have slipped your notice: Important pension reforms were signed into law that will have dramatic impact on retirement for 10 million Americans.

Buried deep in the $1.1 trillion "Cromnibus" spending bill signed last month by President Obama, the reforms aim to head off a looming implosion of multiemployer pension plans - traditional defined benefit plans jointly funded by groups of employers. The eye-opener is that the reforms mean possible cuts in benefits for people who are already retired - a rare move in retirement policy.

Click here to read more at Wealth Management.