July 27, 2005: The Union Trustees on the New England Teamsters Pension Fund have agreed to new pension restrictions—including eliminating 25-and-out and 30-and-out pensions before age 57.

The cuts are coming just as news of the fund’s strong financial performance is hitting members’ homes. The Fund just mailed its summary annual report to members this week, in which it reported that Fund assets grew by more than $121.5 million in the last fiscal year.

Members who do not have 25 years of credit by July 31, 2005, will not be eligible for 25- or 30-and-out until age 57. Members who do have 25 years of credited service, but are under age 57, are protected and can get their earned pension. But if they continue to work they will have their pension frozen until that age. So a Teamster who is 53 and 27 years credit, with a pension accrued of $2,300 per month, could work the next four years with zero pension improvement. Then, at 57, the pension will snap back to the full rate.

Pension accrual rates are also frozen. New contracts will have to increase pension contributions by 5% per year to maintain the present rate of accrual.

But the biggest cuts are in early retirement: the Trustees’ July 13 announcement states that the goal is to keep Teamsters working longer.

While most Teamsters don’t retire before 57 and will be hurt very little, many do retire early. Many are forced to because of company closures (including the Red Star victims) or health factors. These Teamsters are going to take the brunt of the cuts imposed.

Worst hit of all are those who fall short of 25 years. A Teamster with 24 years credit, at age 49, will not become eligible for any Special Service (25- or 30-year) pension for eight years, until age 57.

An announcement is expected to reach New England Teamsters any day with the details of the cuts.

July 27, 2005: Teamsters in New England reacted angrily when the New England Pension Fund announced new benefit restrictions—including eliminating 25-and-out and 30-and-out pensions before age 57.
The changes were announced on July 15, just two weeks after the fund announced that its assets grew for the second straight year. In all, the fund’s assets have grown by more than $429 million in the last two years.

The pension cuts come despite James Hoffa’s promises after he negotiated the “Best Contract Ever” at UPS—as well as after freight and carhaul negotiations—that members’ pension benefits would be secure for the life of these agreements.

New England pension accrual rates are frozen. New contracts will have to increase pension contributions by 5 percent per year to maintain the present rate of accrual.

The biggest cuts are in early retirement. If you do not have enough years of credit by July 31, 2005, you will not be eligible for 25- or 30-and-out until age 57. Members who do have 25 or 30 years of credited service, but are under age 57, are protected from the cuts by federal law and can get their earned pension.

UPS and other employers wanted the fund to make even more drastic cuts to members’ benefits, but union trustees refused.

No Grandfathering Protections
Unlike in the past, the changes did not include grandfathering provisions to protect Teamsters who are close to making their 25 or 30 years and were planning to retire soon. Members were given just two weeks notice of the changes.

TDU has received numerous reports of members’ retirement plans being thrown into chaos by the changes.

“I had planned to retire in November 2005 once I made my 30 ‘good years’ after 36 years as a Teamster,” said Dan Faust, a ready-mix driver from Local 42 in Lynn, Mass.

“Now my retirement has been put off for two more years until I turn 57. What really shocked me is they did not grandfather us in as they’ve done in the past. It’s wrong and cold.”

There’s an additional catch that punishes Teamsters with 25 years who continue working. Beginning July 31, these Teamsters will have their pension frozen until they reach age 57. So a Teamster who is 53 with 27 years credit, with an accrued pension of $2,300 per month, could work the next four years with zero pension improvement. Then, at 57, the pension would snap back to the full rate. But a member who has to retire before 57 because of injury or the closure of their company would work extra time for no additional benefit.

Making Members Work Longer
The fund notice said openly that the goal was to get members to work longer.

“I’ve had some of the union trustees on the fund tell me you really shouldn’t be looking to retire that early,” said Jack Reardon, a UPS feeder driver and vice president of Local 170 in Worcester, Mass. “That’s what I expect to hear from the company. You try driving for 25 or 30 years and then be told you need to spend several more years behind the wheel. It’s not right.

“We used to say, ‘When I hit 30 years, you can retire me but you can’t fire me.’ Well that’s out the door,” Reardon said. “I’ll have to work 36 years to be 57. Members are asking, ‘What did we do to deserve this?’ ”

While most Teamsters don’t retire before age 57 and will be hurt very little, many do retire early. Others are forced to because of company closures (including the Red Star victims) or health factors. These Teamsters are going to take the brunt of the imposed cuts.

Other Teamsters hit by the cuts are members who sacrificed wage increases in recent contract negotiations in order to get pension contributions high enough to maintain eligibility for special service pensions—for which they won’t qualify under the new rules.

That’s just what happened to approximately 900 bakery drivers covered by a recently negotiated regional agreement with Interstate Bakeries Corporation. These members took a two-year freeze in their commission rate in order to stay eligible for 25- and 30-and-out pensions.

That contract promise has been broken. But these Teamster drivers are not getting back their commission increases.

July 27, 2005: On June 29, a congressional committee passed a pension bill that would endanger Teamster pensions by making it easier for multi-employer plans to cut retirement benefits.

The misnamed “Pension Protection Act” contains a dangerous provision that would allow troubled pension plans to cut benefits that members have already accrued—and even cut the benefits of Teamsters who have already retired for less than one year. Under current laws, these cuts are illegal. Only future pension accruals can be cut.

Not surprisingly, UPS management lobbied heavily for the bill’s passage (HR 2830). But the bill was also supported by the trustees on the Teamsters Central States Pension Plan. And James Hoffa himself hailed the bill as a “great first step.”

All 29 Republicans on the House Committee on Education and the Workforce supported the bill, introduced by Rep. John Boehner (R-Ohio), and all 22 Democrats refused to vote on the measure. The bill will be considered in other committees and by the Senate

Teamsters, take warning: this bill is dangerous. UPS management supports this bill because they want the Teamster Central States Pension Fund, and possibly other Teamsters funds, to be able to cut already-earned benefits.

If passed into law, the bill would reduce pension security for Teamster members—and all working families. That’s why the Pension Rights Center, the organization in Washington that protects and promotes the pension rights of American workers and retirees, opposes changes that allow cuts in earned pension credits.

Your Pension in Danger

The proposed bill would make it easier for a troubled multi-employer pension plan to go into “reorganization” status. Once a plan is in “reorganization” the trustees would be free to drastically cut benefits, even benefits already accrued.

If this happens, a Teamster with 30 credit years in Central States could possibly be told, “Sorry, your 30-and-out credits won’t work. You have work until you are 62 to get it.” Disability pensions could be cut, 25-and-out and 30-and-out benefits could be cut for working Teamsters and for those who are retired less than one year.

Only retirement benefits at “normal retirement age” would be legally protected. This is age 62 or 65 for most pension funds.

Employers, Hoffa Want More Power to Cut Your Pension

Under present law, these cuts are illegal.

UPS management wants that changed. So does the Hoffa administration. In a letter to all local leaders in February, IBT leaders complained that “Trustees are limited by ERISA and can only affect [cut] future accruals.” ERISA is the federal pension law that makes it illegal for pension plans to cut benefits that employees have already accrued.

Hoffa, sold his “Best Contract Ever” at UPS as well as the freight and carhaul agreements on the promise that our benefits would be protected. Now he is using your dues money to lobby Congress so Teamster plans can cut benefits that members have already earned! Hoffa’s own lucrative pension plan is unaffected by this proposal.

Why would the Hoffa administration do this? Because Hoffa and other top Teamster officials are intimidated by UPS management. UPS has told them either the company get pension cuts or they will try to pull out of the Teamster pension plans in the next contract.

Time to Fight Back, Not Give Up

Instead of caving in to the company’s threats three years before the next negotiations, our union leadership should be leading members in a fightback to protect our benefits. We should be lobbying Congress for pension reform that protects Teamster retirement security—not undermines it.

The IBT should be educating members about the threat that a UPS pullout would pose both to all Teamsters’ retirement security. Instead, the IBT has let UPS’s rumors and attacks on our pensions go unanswered.

Finally, the IBT should be mobilizing members to fight for adequate funding of our pension plans in the coming contracts. It may require some sacrifice such as reduced wage gains, but we can negotiate these increases.

In fact, on August 1 another sixty cents per hour will go into the Central States Pension Plan for UPS, freight, carhaul and certain other Teamsters. That increase alone will put nearly $100 million a year in new money into Central States. More of that can be done in the next contract.

What You Can Do

This is time for Teamsters to speak out. Write your Congressional reps and Senators. Urge them to oppose any pension bill that allows for cutbacks in earned benefits. Ask your union officers to do the same.

We also urge Teamster members to contact James Hoffa and tell him to use our dues money to fight to protect our benefits—not to lobby for legislation that will make it legal to cut pension benefits we have already earned.


Click here for a downloadable TDU Pension Cut update to distribute to fellow Teamsters

Central States Teamsters click here for a flyer from the Central States Pension Improvement Committee

July 27, 2005: The IBT election is more than a year away and already TDU has caught James Hoffa using members’ dues money for campaign purposes.

On July 15, independent Election Supervisor Richard Mark ruled that Hoffa used union funds to poll carhaulers on how they would rate Hoffa’s job approval. As a result of the violation, Hoffa was ordered to pay $2,000 to the union and to share the results of the poll with opposition candidates who later become accredited.

Hoffa inserted his campaign questions into an IBT poll of Teamsters who work for Allied Holdings, the largest carhaul employer. The members were also asked if they would accept mid-term contract concessions. On June 1 carhaulers got their first wage increase in three years, and Allied balked at paying it. Allied has been losing money (and cutting Teamster jobs) consistently for several years.

The poll questions were written by Hoffa’s campaign consultant, Richard Leebove, and his campaign manager, Todd Thompson. Neither has any experience representing carhaulers.

The election protest was filed by Allied driver and Local 957 member Rob Hackett and by TDU, both represented by attorney Barbara Harvey. Hoffa was represented by his campaign attorney and son, David Hoffa.

July 27, 2005: In an embarrassing retreat from his promises to “run a corruption-free union” and “get the government out of the Teamsters,” James Hoffa has officially sacked all plans to try to negotiate an end to federal supervision of our union.

On July 20, Hoffa’s General Counsel, Pat Szymanski, told the Daily Labor Report that the Hoffa administration has given up its goal of ending federal supervision until at least 2007.

According to the Daily Labor Report, “Szymanski said the controversial conclusion of Project RISE, which might have served as the self-policing mechanism taking the place of the IRB, leaves the union in an inferior position to be able to end federal supervision.”

The article went on to report, “Szymanski said that the damage resulting from Stier’s departure has derailed the union’s plans” to try to end the federal consent order.

Embarrassing Failure for Hoffa

The announcement is an embarrassing admission of failure and a huge retreat for the Hoffa administration, which spent $15 million over five years on Project RISE. Hoffa’s goal was to use RISE as leverage to end the consent order for the Teamsters.

But Hoffa’s leverage disappeared when RISE director Edwin Stier and his entire staff of investigators resigned in protest in April 2004, and issued a report blaming Hoffa for stifling anti-corruption efforts, including investigations of organized crime influence.

In the year since then, Hoffa paid another huge sum of union money to Edward McDonald to issue yet another report, supposedly to get to the bottom of the corruption allegations that led to the collapse of RISE.

Instead, McDonald issued a whitewash. The Hoffa administration released a portion of the McDonald report on July 14. It says nothing on the anti-corruption program. It consists solely of a denunciation of Stier, the former federal prosecutor Hoffa handpicked, paid millions of dollars of dues money, and hoped would end federal supervision of our union.

Just a week after the McDonald report’s publication, the Hoffa administration has openly admitted that this effort not only failed, but backfired, making any efforts to end federal supervision of our union pointless until at least 2007.

Union Far from Clean

Hoffa first promised 10 years ago to rid the union of corruption and establish an independent anti-corruption program.
After Hoffa’s two terms in office, experts say we are farther than ever from that goal.

The Association for Union Democracy’s Herman Benson told the Daily Labor Report, the Teamsters “are no place with respect to reform and they are worse off than they were before Project RISE. The very guy they hired to do the job now says they can’t do the job.”

So now our Teamsters Union has no anti-corruption program and no hope of replacing the Independent Review Board (IRB) with an internal clean-up program as long as Hoffa is at the helm.

No wonder Hoffa is hunting for a scapegoat and Teamster members are looking for new leadership in 2006.

Click Here for Past Coverage

July 5, 2005: For the first time in recent history, the grocery contracts in Southern California will be negotiated separately. If it’s done right, it will be an opportunity to address problems that have been ignored in past negotiations.
In June, Teamster leaders had a meeting on how the separate negotiations would proceed. They agreed that the first target would be Stater Brothers. Stater is not a national chain, so it would be harder for the company to take a strike.

Additionally, they were not hit by the battle with the UFCW last year, so they are in a better financial position to improve the contract. Finally, Stater’s is opening a new distribution facility this year and it doesn’t need a labor dispute to interfere.

Regional Organizing Strategy
The plan is to use the Stater’s settlement as a pattern for the others.
This was a good strategy, but then Local 630 Secretary-Treasurer Paul Kenny jumped the gun. In a surprise move, Kenny announced a tentative agreement with Unified Western Grocers.

Even though other locals involved with Unified were not aware of the deal, Kenny scheduled a ratification vote for July 19 at the work sites.
The contract does not expire until mid-September so there was no need for a rushed vote.

Members also wanted written copies of the proposed agreement before a vote was taken so they could thoroughly review the offer.

Then, suddenly the vote was called off. Whatever the reason, now there is the opportunity to use the strategy used in other parts of the country. The union should let the warehouse companies know that each settlement must be better than the previous one, and then stick to it. This has resulted in improved contracts in the industry. It’s time for Southern California to do the same.

July 5, 2005: Many warehouse and grocery workers are probably familiar with RFID technology used to track inventory, but The Guardian, a major British newspaper, reports that warehouse operators in Britain are now tagging workers also. Researchers and the union are concerned that “the new technology is raising a host of ethical issues, with the danger that the computer is taking over the human rather than humans using computers” and that “the employee is unable to do anything without the machine knowing or monitoring.”

When our last contract was negotiated, the BA didn’t tell us the whole story. The local had a meeting where they just told us about the wages and a few other things. Months later, when we finally got a copy of the contract, we found new language that weakened our seniority rights. Isn’t this illegal?
–Won’t Be Fooled Again

Dear “Won’t Be Fooled,”

The IBT constitution requires a secret ballot vote on contracts, and federal law (the Landrum Griffin Act), requires a “fair and informed vote.” A verbal review of select improvements that leaves out important language changes falls short of that standard. I don’t blame you for having a beef.

The problem is that once the contract signed, it is likely legally binding even if it was not properly ratified. Even if you sued your union leaders, your employer would surely claim a valid, signed contract. When it comes to fair contract votes, it’s easier to prevent abuses than to correct them afterward.

To prevent this in the future, you need to talk to other members who “won’t be fooled again.” When the next contract talks begin, get signatures on a petition or group letter asking the local to take the proper steps to protect members right to a “fair and informed vote” by:

 

• providing advance notice of any contract ratification meeting;
• making the complete text of all changes available to members before any vote;
• providing members with time to review the changes, ask questions, and discuss the pros and cons before a secret ballot vote is held.

It’s up to us, the members, to enforce our right to a fair contract vote. For help, contact TDU.

I recently heard that some part-timers at UPS are in Teamster pension plans. As a part-timer I was in the company plan. After I went full-time, I didn’t get any credit toward my Teamster pension for my part-time years. After Central States announced the pension cuts, they said there are not enough active workers in the Fund. Then why aren’t the part-timers in the fund?
–UPSet at UPS

Dear UPSet,

What you heard is true. UPS part-timers are in Teamster pension plans in two of our union’s biggest pension plans, the Western Conference and New England, and they are also in the Upstate NY Plan. This dates prior to1979, when UPS contracts were regional and local.

When part-timers are in the company plan, it’s lose-lose just like you said. When you go full-time, your part-time pension credit doesn’t follow you. The small pension that comes from part-time years isn’t much. Reciprocal benefits with Teamster plans help members qualify for 30 & Out—but the monetary value of our part-time years is pathetic. In areas where part-timers are in the Teamster plans, members get a much better deal.

The fact is most part-timers don’t qualify for any pension, because it takes five years of part-time work to vest in the UPS pension plan.

Where do their pension contributions go? Where part-timers are in the company plan, that money goes right into the company’s pocket. But in the West and the Northeast, it stays in the pension fund where it benefits other Teamsters.

If part-timers were in the Central States Fund, UPS would pay approximately $140 million more per year in pension contributions to the fund.

The result would be a stronger pension fund for everyone and pension credit for our part-time years. Win-win instead of lose-lose.

As part of the fight to reverse the pension cuts and restore the long-term health of our Teamster pension plans, we should be working to include all UPS part-timers in Teamster pension plans in the 2008 negotiations. If UPS can do it in 18 states, they can do it in 50 states.

 

June 6, 2005: Teamsters from 15 different locals in the South and Southeast converged in Atlanta on July 9 to discuss plans for the 2006 IBT election and delegate races, and to learn how to be more effective Teamsters.

Nearly all of the 50 members on hand are preparing to run for IBT convention delegate in early 2006. The meeting was an opportunity to share ideas and strategies for the elections.“We need to take steps now to show Hoffa the way out of office in 2006,” Nashville Local 327 member Matt Studd said. “And then we need to shut the door behind him for good.”

Dan Scott, secretary-treasurer of Seattle Local 174, was a featured speaker at the meeting. Workshops addressed how to run for union office and how to overcome apathy and get members involved in the union.

“This was a terrific event,” Local 391 retiree Frank Bryant said. “We brought a couple of carloads of people from North Carolina. We learned a lot and had a chance to meet many other excellent members and officers from other areas.”

“At the conference, we brought together Teamsters from across the South who share the same goals,” said Willie Hardy, a retired Local 667 member and TDU staff organizer. “We want to dump Hoffa in 2006 and build a stronger Teamsters union. We’re building the rank and file network we need to make that happen.”