November 4, 2004: Teamster members have been pushing for trustees to protect pension benefits, and to win higher employer contributions to make up for the stock market downfall following September 11.

Finally, a group of pension trustees has heeded the call. The trustees of the New Jersey Joint Council 73 Pension Fund responded to their funding shortfall by forcing contributing employers to double their contributions to avert a benefit cut.

But the JC 73 Pension Fund is for local union officials and staff only. Doubling the size of the “employer” contributions means that local unions will be sending twice as much of the members’ dues money as before to fund their officials’ pensions.

The amount of members’ dues that local unions are now paying into this extra pension plan is equal to 20% of the total gross salaries of all employees and officials! That’s a lot of money that could be used for organizing or to build Teamster power.

For some local clerical staff, the JC 73 plan is their only pension. But for the vast majority of the fund’s participants—local union officials—the JC 73 pension is a second (or even third) pension. The plan also features a generous lump sum payment option.

It’s good to know that at least somewhere in our union, fund trustees are going the extra mile to avoid pension cuts. Now wouldn’t it be nice if some trustees would do the same for the rank and file—say out West and in the Central States?

November 4, 2004: As African Americans learn what TDU is about, they are joining in numbers. At the TDU Convention Black Caucus we discussed increasing our own communication network and outreach. Our challenge in the coming year is to strengthen our outreach to African Americans and help develop more African American leadership in our union at every level—from shop stewards to local officers to international officers. It’s our job as TDU—along with the Teamsters National Black Caucus and other concerned organizations—to help members grow as leaders and to push so that our union draws strength from the greater involvement of African American members.
Willie Hardy, TDU Steering Committee
Local 667, Roadway, retired
Memphis

November 4, 2004: The AFL-CIO has a website which identifies companies in your community that are shipping jobs overseas. You can check it out here.

Another new website of interest: Shop Union-Made was recently launched as an online source for products and services by union workers, including cars, clothing, computers, greeting cards, musical instruments and telecommunications services.

November 4, 2004: Local 386 has signed a first contract for workers at Winco Foods, a growing wholesale distributor in Ceres, Cal. The contract undercuts Teamster grocery standards by keeping members out of Teamster pension and health and welfare plans.

The contract was negotiated by Local 386 Secretary-Treasurer John Souza, who just happens to be a trustee of the Western Conference of Teamsters Pension Trust!

Instead of Teamster benefits, Winco workers will be in a company health plan and a company-run Employee Stock Ownership Program (ESOP). Winco will offer a 401(k), but will not match employees’ contributions. Under the company health insurance plan, the company will pay 85% of covered medical costs.
The union leadership’s initial bargaining position was that members get Teamster pensions and health and welfare. But they dropped this demand when management offered the ESOP and company health insurance.

Organizers’ Reaction
With about 230 members eligible to vote, the six-year contract was ratified by 70 to 58.

This has come as a shock to Teamster members at the Ceres facility (just outside Modesto) who transferred there from the Winco facility in Salem, Oregon.

As described in the new Teamster magazine, they were leaders in the organizing drive at Ceres. They gathered signatures on union authorization cards and talked to workers about how the union worked for them in Oregon. There they had full Teamster pension and health and welfare benefits as members of Local 324.

They’re glad to be union again, but think the new agreement could have been a lot better. “The plus is that we got a contract,” says Winco driver Rick Denton. “The big negatives are that we did not get a Teamster pension or health insurance. And wages are way too low for new hires.”

New hires will actually make $1.28 an hour less under the new contract than they did before the contract was signed. Under the new agreement, newly hired drivers will be paid $11.72. Management sold members this concession by crediting current drivers with 3120 extra hours on the wage progression schedule.

These concessions came just months after Local 324 in Oregon won major improvements for Winco Teamsters there.

Where is the IBT?
Allowing Winco to operate without Teamster benefits will undercut grocery members throughout California. Major grocery contracts are coming up, and other locals are already being undercut, including nearby Stockton Local 439, which has Safeway, Unified Western Grocers and Ralphs to contend with.

So why was this contract approved by the IBT? All grocery distribution contracts are supposed to be approved by the Regional Warehouse Division Director (Steve Vairma of Denver Local 435), to preserve area standards. The contract also had to be approved by Joint Council 38. This contract should have been sent back to the bargaining table to protect the pension rights of the Winco workers and the standards of thousands of Western grocery Teamsters.

November 4, 2004: Milwaukee Local 200 has won a strong new contract for the 650 Teamsters employed as warehouse workers and drivers at the Roundys grocery warehouse in Wauwautosa, Wis.

The union beat back management demands that members pay for health care, and won model production standards language. It is a big victory for the Roundys members and for the reform leadership of Local 200 that took office less than one year ago.

Under the new agreement, Roundys Teamsters will continue to have zero co-pay for their health insurance. This goes against the trend in the grocery industry, sometimes supported by top Teamster officials, of shifting health care costs to workers. This was management’s number one bargaining demand.

The union also won model production standards language. The new agreement allows the union to have six members, trained by the union, who will function as internal auditors. These members will monitor the company’s use of production standards.

If there is a disagreement between the union and management over a standard, management’s standard cannot be implemented until the dispute is arbitrated. This is a major improvement at a facility where grueling production standards have been a long-term problem.

The four-year contract includes wage increases of $.40-$.40-$.40-$.45.

Preparation and Priorities
In preparation for negotiations, the new Local 200 leadership conducted a member survey to guide bargaining demands. Members identified preserving health benefits and managing production standards as their top priorities. In addition to the bargaining committee of elected shop stewards, the local set up separate member subcommittees to tackle issues like benefits and production standards. The contract was approved by an 85% yes vote.

“We were all expecting that health care would have gotten hit, but we preserved it,” said Don Janz, a warehouse worker at Roundys. “And we got good contract language. We would have liked more on raises, but given the state of the economy we did all right. The majority of the guys are really pleased. In the 26 years I’ve worked here, I’ve never seen a contract so easily voted in.”

November 4, 2004: The IBT’s biggest organizing win of the year came in August when 3,000 customer service workers at America West voted Teamster in a big win in the airline industry. Congratulations to the organizing team and the America West workers!

November 4, 2004: Sue Mauren is in the Club. Minnesota Local 320 filed their Form 990 tax return late, so we were unable to include Sister Mauren in our $100,000 Club report. Mauren, the secretary treasurer of Minnesota Local 320, received $112,273 in salaries and $126,714 total in 2003. She gets salaries from Local 320, Joint Council 32, and the International Union. Mauren’s brother-in-law, Jeff Farmer, is the International’s Organizing Director.

Additional Scam in the Club: The International Union pays a special benefit—not included in the listed salaries of officials—which is virtually unheard of, even among corporate execs.

The Union pays the employee portion (as well as the employer portion) of FICA tax, meaning that each official’s salary is really about 7.65% higher than reported. This bonus paid to members of the $100,000 costs members an extra half-million dollars per year. Wouldn’t it be better to use it for organizing to build Teamster power?

November 4, 2004: Teamsters and local officers at UPS often want to know if the issue they have grieved has been decided before—and if so, what the decision was. Just as common is the answer “We don’t know.”

Sometimes we are told we should give up on a grievance because the same issue has already been lost in another case.

Now the international union has provided local unions with a compact disk containing arbitration and court decisions.

The digest of cases goes back to 1968, when just a few locals or regions had arbitration in their contracts. Most of the cases in the digest are more recent, stemming from arbitration provisions won in the national contract in the 1990s.
The digest also cites court cases (including NLRB and EEOC) going back to the 1980s.

The next time your local is unsure whether cases have been won or lost, remind them that they can look it up in the IBT digest

November 4, 2004: UPS after-tax profits rose 20.8% to $2.47 billion in the first three quarters of 2004. Revenue during the same period compared to 2003 grew by over $2 billion. Both international and U.S. package volume were up over last year. UPS’ busiest quarter is still ahead, meaning that 2004 will be another record year for the company.

January 28, 2005: There has been a great deal of discussion lately about pension relief from many sources. The IBT releases regular statements regarding the need for relief, and in the July/August issue of Teamster Magazine the IBT called for Teamsters to “join [John] Kerry in his fight for legislation that provides meaningful relief for multi-employer pension plans.”

Our committee couldn’t agree more that our pension funds need help but isn’t reform more important than relief?

Interestingly, Timothy P. Lynch, president and CEO of the Motor Freight Carriers Association (MFCA), agrees with the IBT that relief is needed but he also claims reform is necessary. The Central Pennsylvania Teamsters Reform Committee agrees! However, his idea of reform is skewed almost entirely on behalf of the companies he represents, naturally!

We Might Be Able to Agree

In testimony before Congress Mr. Lynch made a number of points we might be able to agree on. For example:

“The employers...are concerned about the current framework for multi-employer plans and strongly believe that if not properly addressed, the problems will only get worse, thus jeopardizing the ability of contributing employers to finance the pension plans and ultimately putting at risk the pension benefits of their employees and retirees.”

Note that the employees and retirees come last in regards to his concerns.

The main point of his testimony was that the companies have no control over how the funds are maintained. He reiterated this point near the end of his statement:

“Employers cannot be expected to bear ultimate responsibility for the financial viability of plans, but at the same time be precluded from any ability to hold the plan and its trustees accountable.” 

Mr. Lynch’s statement conveniently forgets this position is set by ERISA, the law covering pension benefits and that we working Teamsters pay for our retirement and medical benefits with our labor, skill, and dedicated service. Our benefits are negotiated and earned; they are not a gratuity or a gift. 

Lynch is quick to point out the costs of our benefits and that they are part of the National Master Freight Agreement but one gets the impression from reading his testimony that their contributions are something they do willingly instead of something they are contractually obligated to do. Lynch complains, “because of the legal restrictions placed upon trustees in furtherance of their fiduciary responsibilities, there is very limited control by our companies over the actions and decisions of trustees.”

Turn Over Control?

So are we to assume the solution is to turn over all control to the companies instead of trustees who are legally obligated to act in the best interests of the participants?

You really need to read the entire testimony to see Mr. Lynch’s motives. I wonder if the only reasons Mr. Lynch testified were to:

• Eliminate the excise tax (avoid company liability),
• Gain control of the pension funds (avoid additional liability),
• Reduce the total number of Teamster pension funds from around 22 to one or two: “If two pension plans can cover 85% of the country, there is no reason why we need 20 to cover the remaining 15%,”
• And last but certainly not least—get rid of the pesky fiduciary responsibility.

Committee Has Suggestions, Too

Our committee also has some suggestions to reform pensions but I wonder if we will ever get the opportunity to share them with Congress:

1. Every citizen/participant has the right to expect the utmost loyalty and diligence from individuals and companies who safeguard and administer the benefits plans that we Americans depend upon for our retirement security and health (more fiduciary responsibility).

2. When pension laws are violated intentionally or recklessly, then those who are responsible for the violation can be held liable for punitive damages in order to punish and prevent such violations, just as with other important rights under federal law (consequences for breaching fiduciary responsibility).

3. Enact extremely harsh penalties for pension improprieties, with effective enforcement tools built into ERISA (validity to existing laws).

4. Make available to all participants all information concerning their pension fund, barring access to nothing. (tools the participants can use to educate themselves).

5. A complete, annual, in-depth audit by an independent firm must be made of each pension fund. All aspects of every fund must be examined and made available to participants (honesty).

6.  All pension fund changes must have complete plan changes and complete documents written and filed with the IRS and the Department of Labor before implementation. All plan participants must be notified of the proposed changes 60 days prior to any plan change (accountability).

7. Any money paid to a fund on behalf of, or by, a participant must become an accrued benefit for that participant upon the fund’s acceptance of that money.

8. A company’s withdrawal liability must be paid before a company can be sold or merged.

Many more items could be added to this list. Isn’t it time our union put its political clout behind winning these kinds of protections?

Overhaul PBGC Rates

Finally, any meaningful reform should include overhauling the Pension Benefit Guaranty Corporation’s (PBGC’s) insurance rates for multi-employer pension plans. Single-employer funds pay $19 per worker per year for coverage but multi-employer funds pay only $2.60 per worker. Is $16.40 per year the sole reason my potential PBGC insurance reimbursement (if the plan fails) is only one-third that of my single employer brothers?

The double standard goes further. If a single employer plan fails (and almost all failures are single-employer plans) the maximum benefit from the PBGC is $3,580. If a multi-employer plan fails the maximum is only $1,072 per month.

The squeaky wheel gets the grease. Mr. Lynch squeaked pretty loudly testifying before Congress, and the employers will likely step up their campaign in the future. The Bush Department of Labor has so far ignored the needs of pension plan participants.

How much noise do we have to make before we too can be heard?