August 6, 2008: Ever since the Baltimore Local 355 fund cut the pension accrual rate to zero, members have been asking why the cuts happened, and what the local is doing to restore the cuts.

Now their fund is telling them it won’t answer their questions. But members aren’t taking No for an answer.

In February, Local 355 President Denis Taylor said the fund would be in the Red Zone, the worst funding level, if he didn’t cut the accrual rate to zero. Members have had their pensions frozen since the cuts took effect on March 1.

Now the fund is officially in the Green Zone, the highest level. But how it got there has never been explained to members.

Rank-and-file members in Local 355 have obtained the actuary’s report that recommended the cut. What the report does not say: how big the cuts should be, how long they should last, or how the cuts will affect the fund.

When members requested an explanation of how the cuts are affecting the fund, the fund administrator refused to disclose their projections. The fund said they already answered members’ questions.

“They say they’ve told us everything we need to know, but they haven’t told us when our benefits will be restored,” said Keith Reinhard, a Local 355 DHL delivery driver. “Our pension fund is either keeping members in the dark—or they’re driving blind.”

Pension Protection Act

Rumors are circulating in the local that the Pension Protection Act, the new pension law that took effect on Jan. 1, forced the fund to cut the accrual to zero.

But the new law does not mandate cuts. The PPA requires funds to declare if they are in the Red Zone, Yellow Zone, or Green Zone, based on their funding level and other factors.

The law also requires funds in the Red and Yellow Zones to create a plan to get above 80 percent funding in 10 years.

Plans in the Red or Yellow Zones do not have to cut benefits. The Central States Pension Fund announced earlier this year that it was in the Red Zone, but assured Teamster members that no further cuts were planned.

“Like politicians, our officials have gotten comfortable with a long term in office and they think they can just sail through,” said Reinhard. “They need to be held accountable for their actions and deal with the problems in front of them.”

Pension Bill of Rights

Members of Local 355 have launched a petition campaign to win a Pension Bill of Rights to protect their benefits. The Bill of Rights includes:

• The right to be informed and to get regular updates about their fund.
• The right to an accrual and an end to the pension freeze.
• The right to have a say if cuts are needed.

The movement is catching on. “I met some other members before my shift one morning and asked other drivers to sign the petition,” reports Kenny Walker, a UPS package car driver at the Hunt Valley building.

“We got over 120 signatures in a little over an hour. Only two people we saw wouldn’t sign—and one of them was late and running to get in the building.”

Building TDU

Since the cuts, TDU members in the local started distributing more Convoys and special pension bulletins. TDU has lined up attorneys to help members obtain important plan documents from the fund. And TDU organized an informational meeting to give members the facts about the new pension law and their benefits.

“It’s because of TDU that we’ve been able to get information from our fund and get it out to members. Now our job is to make that network even bigger.”

August 11, 2008: In the ‘90s, TDU built a nationwide movement to get pension improvements.

Without TDU’s organizing efforts, those improvements would not have been possible. I’m proud to say I was a part of that movement.

Having a network of members in our area is vital. I got to know a lot of feeder drivers in every barn. I would get copies of flyers and Convoys to them, and in turn, they would pass them out.

I didn’t stop with UPS. I also knew a lot of freight drivers and expanded my reach through them, and also some of the white paper barns, too.

You definitely need a good network in any campaign. TDU did a great job of building them nationally and a lot of members did a good job getting the message out.

I find it very hard to believe that after the fight a lot of us members waged to win better contracts and pensions throughout the ‘80s and ‘90s, the company and union are taking away what we earned, just like that.

Members should know just what TDU has won for them over the years. I hope that TDU will win back the IBT for the members—and for that to happen we will need a very strong network.

We’ve done it before, and we can do it again.

Tommy Burke
Local 391, UPS Retired
Fayetteville, N.C.

July 16, 2008: Ever since the Baltimore Local 355 fund cut the pension accrual rate was cut to zero, members have been asking for answers.

Now the fund is telling them it won’t answer their questions.

Download a bulletin you can post and distribute to other Teamsters.In February, Local 355 President Denis Taylor said the fund would be in the Red Zone, the worst funding level, if he didn’t cut the accrual rate to zero.

Now the fund is officially in the Green Zone. But how it got there has never been explained.

Rank-and-file members in Local 355 have obtained the actuary’s report that recommended the cut.

The report leaves out projections for how the cut would affect the fund’s funding status or credit balance—the two factors used to decide whether a fund is in the Red Zone or the Green Zone.

When members requested an explanation of how the fund went all the way from the Red Zone to the Green Zone, the fund administrator refused to show their projections. The fund said they already answered members’ question.

“Our fund is saying they’ve already given us all the information. But there’s nothing in their report that shows how the cut really affected our fund,” said Ron Reinhardt, a member at the Baltimore UPS building.

“I still have questions—and I want answers.”

Download the actuary’s report and the letter denying more information to Local 355 members.

Is Local 355 Doing Everything It Can?

Members are asking if local officials are doing everything they can to restore their benefits:

Updates. At the April membership meeting, members asked for monthly updates on the health of our fund. Taylor agreed.

This year has been rough in the markets. But Taylor has not given members any update about their fund.

Performance. The Local 355 has been performing below expectations—and other Teamster funds—for years.

Over the last eight years, our fund has earned 6.1 percent on its investments. That’s less than the 6.5 percent earned by the Central States Pension Fund.

After 9/11, the fund was slower to recover than other Teamster funds. Since 2003 the Local 355 fund has recovered at about 9.7 percent a year, on average. Central States grew by over 14 percent annually in the same period.

New Contributions. Last year our union won record benefit contributions from UPS. This year we did the same at DHL.

Our union said the UPS contributions would be enough to protect our benefits. Instead members got cuts.

Kept in the dark. Under-performing investments. Broken promises. Members deserve better.

A Pension Bill of Rights

Members in Local 355 have launched a campaign to win a Pension Bill of Rights to give members access to information about their fund—and to make sure members have a say when there are cuts.

Hundreds of Local 355 members have already signed a petition in support of the Pension Bill of Rights. Click here to download the petition that you ask other Teamsters to sign.

Help spread the word. Download a bulletin you can post and distribute to other members.

What do you think our union should be doing to restore the benefits? Click here to send in your questions or comments.

June 20, 2008: A report by Local 804 members reveals that the union’s health fund lost nearly $18 million from 2003 to 2007. During that time, the fund lost 55 percent of its assets. Local officials diverted millions of dollars to the local’s pension plan and hiked members’ co-pays.

Now members are asking what the new contract will mean for the health fund and their benefits.

This crisis in the health fund was brought to light by Local 804 Members United, a network of UPS Teamsters in the New York local who work together to defend their contract and benefits.

Local 804 members reviewed the fund’s financial documents through 2007—the most recent year that the plan’s financial records are publicly available. The fund’s own records revealed that the money allocated under the 2002 UPS contract was not enough to cover members’ healthcare costs. For years, the fund spent down its reserves to make up for the shortfall.

With the health fund already in trouble and losses topping $6 million, Local 804 officials voted with UPS to cut the company’s contributions to the fund. Over the next year, UPS’s healthcare payments were reduced and millions were diverted from the health fund to the pension fund.

Starved for contributions, the health fund lost a whopping $11.3 million in two years. Local 804 members were never told a word.

“It’s totally irresponsible how they let these reserves disappear,” said Pete Mastrandrea, a Local 804 feeder driver. “It’s inexcusable how they’ve managed these funds and they need to answer to the membership for it.”

Information Brownout

By June 2007, the Local 804 Health Fund had lost nearly $18 million and negotiations on a new UPS contract were underway.

The negotiations gave the union the opportunity to make UPS pony up the money the health fund would need to protect members’ benefits and beef up the fund’s depleted reserves.

Local 804 officials voted with UPS to hike members’ co-pays while the new contract was still being negotiated.

“It’s unprecedented to make givebacks like that in the middle of bargaining,” Mastrandrea said.

When the contract came to a vote, Local 804 members showed they were ready to take on the company to defend their benefits. Members mobilized to reject the company’s first contract offer over the objections of both management and the local executive board.

As a result, members won a better deal that included record pension money. But unaware of the extent of the damage to the Health Fund, members approved a new contract that included just a 30¢ an hour increase into the medical plan in the first year.

It remains to be seen if that will be enough to rebuild the depleted fund without raising the healthcare costs of Local 804 members or retirees—or dipping into contributions that are supposed to go into the Local 804 pension fund.

“When Local 804 members turned down the contract by three to one, that gave our negotiators leverage to make UPS put the money on the table to protect our benefits,” said steward Tim Sylvester. “Our pension fund has sunk into Endangered Status and our Health Fund has lost $18 million on this Executive Board’s watch. There is no excuse if they settled short in bargaining and failed to get what they need to rebuild our benefit funds.”

June 20, 2008: A pension attorney representing Local 804 members has warned trustees at the Local 804 Pension Fund that they are in violation of federal law for refusing to comply with members’ requests for pension information.

Under the Pension Protection Act, members have the right to more financial and actuarial information from our funds—thanks to a successful lobbying effort by Teamsters for a Democratic Union and the Pension Rights Center.

Local 804 members Bill Reynolds and Tim Sylvester have been waiting to receive the information they requested since Jan. 22. But the Fund has yet to turn over the documents or even respond to their attorney. Under the law, the Fund has 30 days to comply with their request.

The Central States Fund, the Western Conference Fund, the Upstate New York Fund, and other Teamster pension funds have all promptly complied with information requests under the Pension Protection Act.

Under the law, courts can and will assess penalties against a fund that fails to respond to members’ legitimate requests for information.

The pension fund, covering 4,000 full-time UPS Teamsters in metro New York, was rocked by a 30 percent pension cut in 2006. The pension issue led Local 804 members to reject the UPS contract last year and win a better offer that restored their pension to pre-cut levels and stopped company and union officials from eliminating 25-and-out pensions for new employees.

Trustees recently notified members that the fund is in the Yellow Zone. They have said no additional pension cuts will be necessary but have provided no information about when benefits might be improved.

Most other UPS Teamsters will get an automatic increase in their pension accrual every year during the current contract. But the accrual in Local 804 will remain frozen at the 2002 level until the trustees vote to increase it.

“Local 804 members were kept in the dark about our pension and the results were not good. Now we want to see the numbers for ourselves,” said Bill Reynolds. “Will members really have to take our own Fund to court to get the pension information we’re entitled to?”

June 14, 2008: Local 355 Teamsters came from UPS, U.S. Foods, Sysco, Giant, and DHL on Sunday, June 8 to discuss the pension freeze in the Local 355 fund.

In March, the Local 355 fund cut the annual accrual rate to zero. That means members’ pensions are frozen and they are not earning any new benefits for hours worked since March 1.

A Plan for Improvements?

At the meeting, pension attorney Ann Curry Thompson explained how the new rules in the Pension Protection Act affect the fund, and Local 355 feeder driver Gary Payne talked about how members were kept in the dark while the funds’ investments under-performed year after year.

With the help of Teamsters for a Democratic Union, members have acquired documents from January recommending the pension cut. In the document, the plan’s actuary warned that “without any changes in benefits or contributions the plan is expected to be in the ‘Red Zone.’”

But the report does not make projections on how the cuts will impact the fund.

“It’s up to our union leaders to have a plan for restoring the benefits,” said Payne. “But they have no plan.” The fund has sent Payne a letter stating that the fund is now in the Green Zone, but they do not say when they will improve the benefits.

Now members are working with Thompson to request new documents projecting how the cuts will affect the benefit fund.

Click here to view the actuary’s report.

Click here to view the letter stating the fund is in the Green Zone.

A Pension Bill of Rights

At the end of the meeting, UPS Teamster Ron Reinhardt talked about what members can do to win benefit improvements. “We’ve got to talk to more members and spread the word to get this job done,” Reinhardt said.

“Already just a few of us have been able to get more pension info from our union than they would have ever given us on their own. Imagine what we can accomplish if more members speak out and get involved.”

Members are circulating a petition demanding a Pension Bill of Rights that would guarantee:

• The right to an accrual and a decent pension.
• The right to information about the fund.
• And the right to have a say when cuts are threatened—including the right to know all the options the trustees are considering.

Click here to download a copy of the Pension Bill of Rights that Local 355 Teamsters are circulating.

Click here to download the Local 355 pension petition.

Tell us what you think. Click here to ask a question or to let us know how you can help.

May 16, 2008: The Central States Pension Fund plans to extend the 2002 pension cuts until approximately 2028, according to plan documents obtained by Teamsters for a Democratic Union (TDU).

The fund does not foresee any more cuts in benefits. But it also does not project moving to a well-funded situation that would allow an increase in pension accruals until 2028.

This information – and more – is contained in the “Rehabilitation Plan,” which is the plan guiding the fund’s policies. Teamsters for a Democratic Union (TDU) obtained a copy of the plan under the disclosure provisions of the Pension Protection Act.

Central States is currently 73% funded, with $26 billion in assets.

For the most part, Central States is continuing the same course it has been on since implementing pension cuts in late 2002. Those cuts reduced annual pension accruals to 1 percent—the minimum amount permitted for plans in the Red Zone.

As employer contributions increase each year, Central States Teamsters will experience pension improvements. But Teamsters won’t see a big increase until the 1 percent accrual is increased.

Without an accrual increase, the pension gap between Central States and other regions will grow wider. If current accruals remain in place until 2028, freight Teamsters in the West will earn annual benefits that are 2 ½ times as large as those Teamsters in the Central States earn.

Eight Percent Rule Will Increase Funding

To boost its income and funding status, the Rehabilitation Plan requires all contracts bargained to have an 8% per year increase in employer contributions. Almost all contracts are in compliance. The majority of Central States’ contributions come from employers under the freight, carhaul, and DHL contracts. Two of those contracts are settled, and carhaul is being bargained now. They have set the standard of a 65 ¢ an hour pension contribution increase each year, for five years.

The 8% rule is a hardship on many locals and members, because a good bit of a local’s bargaining power has to be used to meet that requirement, leaving less money for wage increases and health care. In the next contract round, beginning in 2013, the requirement will be reduced to 6% and then 4%, according to the Rehabilitation Plan.

“Default Schedule”

One new policy of the fund has worried many Teamsters, and has lit up the phone lines at the fund, locals and TDU. This change is the “default schedule.”

This schedule comes into play if a company busts the union, breaks out of the fund, or refuses to agree to the 8% increase in contract bargaining. In this case, the fund’s policy is to eliminate early retirement benefits, and only pay the contribution-based benefit at age 65, or pay benefits reduced by 6% for each year under 65.

When UPS left the fund in December, the fund implemented this rule, and thus UPS has to provide the full pension to Teamsters retiring after January 1, 2008, until they reach age 65. At that point they will receive two checks, one from Central States and one from UPS.

While all national contracts and the vast majority of local contracts comply, some Teamsters are still concerned. In many cases, needlessly so. The fund needs to provide more information to members.

Teamsters concerned about pension rights, and building a strong future for our union and pension plan, can contact TDU with your concerns, or join TDU.

To view a copy of the Central States Fund Rehabilitation Plan, click here.

May 1, 2008: Two months after their fund froze working members’ pension accrual, the movement to protect Teamster pensions is growing in Baltimore Local 355.

On March 1, the Local 355 plan cut the accrual rate to zero. That means that members’ pensions are frozen and working Teamsters are earning zero additional retirement benefits for any of their hours worked since March.

In April, Local 355 members launched a petition campaign to demand more information from the fund about the freeze—and a timeline for improving benefits.

“Members have been taking petitions from me and returning them full of signatures,” reports Ron Reinhardt, a full-time inside worker at the main UPS hub in Baltimore. “We want information about what’s going on with our pensions and we’re willing to do what it takes to get that info.”

The petition drive started at UPS but it has now moved to other companies in the local. “I’ve met Teamsters at Sysco and DHL who are just as angry about the pension freeze as I am,” says Gary Payne, a UPS feeder driver and one of the rank-and-file leaders of the petition campaign.

Members Get Answers

The petition campaign is already getting more information into members’ hands.

When the cuts were announced in February, Local 355 President Denis Taylor told members that the cuts could last three years or more. He refused to give members a timeline for when benefits would be improved.

But at the April meeting, Taylor announced that he personally expected to improve benefits in one year.

Using new language in the Pension Protection Act, Baltimore UPS feeder driver Gary Payne has obtained the Actuarial Valuation of the Local 355 fund.

In this document, independent actuaries warned that the fund would be in the Red Zone by the end of March 2008 if the fund did not take action.

This report was produced months before the pension freeze, but the Local 355 fund made it available only after members requested it under the terms of the new pension law, which gives members the right to receive copies of certain plan documents.

No Freeze Under Red Zone?

Local 355 trustees say they froze benefits to avoid putting the fund into the Red Zone.

But the Red Zone would have stopped cutting the accrual rate down to zero.

Under the new pension law, plans in the Red Zone cannot cut the accrual below one percent of annual employer contributions. Funds in the Yellow or Green Zone can cut the accrual rate down to zero, though.

“Taylor kept us in the dark about what was going on with our pension,” Reinhardt said. “Our local had a tough decision to make, and we deserved to have a say.”

Taylor has said the fund is now in the Green Zone. But as Convoy goes to press, Local 355 members have still not seen the notice from the fund announcing if it is in the Green, Yellow, or Red Zone. Under the PPA, this announcement is due by April 30.

May 1, 2008: Hundreds of thousands of working Teamsters and retirees received a startling letter from the Central States Pension Fund in early April saying that the fund is in critical status.

That's also called the Red Zone. The notice is written in legalese and discusses a potential reduction in benefits.

Given the history of benefit cuts in Central States, it’s no wonder that thousands of Teamsters are calling the fund, their local unions, and Teamsters for a Democratic Union (TDU) for info.

Even UPS Teamsters, who exited the fund at the beginning of the year, got the letter because their retirement after age 65 will in part come from Central States.

The letter—or funding certification notice—was required by the Pension Protection Act, and the wording about “possible benefit reductions” was required by the law. But the Fund could have done a better job of explaining it so that so many Teamsters didn’t assume the worst.

No New Cuts

The good news is that Central States Teamsters and retirees will not face any new benefit cuts.

Those cuts were made four years ago. As a result, the fund has lowered its future benefit obligations. The cuts have driven the average retirement age up from 59 to 61. The fund has increased future income by requiring all new Teamster contracts to increase employer pension contributions by at least eight percent a year.

These measures mean more money will be coming in and less flowing out, so the fund’s balance sheet is expected to improve in the coming years, moving gradually toward being fully funded.

Small Pension Increases

Pension benefits will actually increase over the next several years—even with the fund in the Red Zone. That’s because the amount of retirement benefits that Teamsters earn each year (called “pension accrual”) is tied to employer contributions, which go up each year.

By August 2012, a freight Teamster will accrue nearly $200 a month in pension for a year of work.

Unfortunately being in the Red Zone means that this is the only pension improvement on the horizon in the Central States.

The April letter explains that if a company busts the union, or refuses to sign a contract with the eight percent increases, then cuts will be made in the affected members early-retirement (25- and 30-and-out) benefits.

Our union needs do whatever it takes to ensure that doesn’t happen to any Teamster. Most Central States Teamsters are already under contracts that include the eight percent pension contribution improvement.

The Long Run

No letter from the fund or anyone else can guarantee our pension fund will be secure for decades to come. Our only guarantee is a strong Teamsters Union and labor movement that can stand up to corporations who try to weaken or cut our pensions.

That’s what TDU stands for. We work to inform and unite Teamsters to defend and strengthen our benefit funds.

That’s why we opposed the International Union allowing UPS to buy their way out of the Central States Fund. In that case, corporate greed got its way, and our union leaders didn’t even put up a fight.

Elsewhere, TDU members have successfully mobilized Teamsters to defeat benefit cuts and win improvements.

We need to build our pension fund on the strongest and broadest base. We intend to make that happen.

May 1, 2008: The New England Teamsters and Trucking Industry Pension Fund has put members on notice that the fund will be in critical status (the “Red Zone”) when its funding classification is officially certified later this year.

The fund also announced strict new rules that will make it tougher for local unions in contract negotiations.

The new rules are part of the fund’s Rehabilitation Plan—a plan required by the Pension Protection Act for improving its funding within a 10-year period.

The New England Fund has until Dec. 29 to officially certify its status under the Pension Protection Act—and a year after that to formally adopt a Rehabilitation Plan. But in a March 27 notice to members, the fund announced it is taking action now.

No Cuts—For Now

The good news is no pension cuts are being implemented—at least for now. Instead of reducing benefits, the fund is focusing on increasing revenue by requiring all new contracts that are negotiated to include a 10 percent increase in hourly pension contributions each year.

The 10 percent rule applies to all contracts negotiated after March 4. If a local union is unable to bargain a 10 percent annual increase in pension contributions, then Teamsters covered under the contract will suffer pension cuts.

The 10 percent Maintenance of Benefits (MOB) requirement is the highest in the Teamsters. It doubles the five percent MOB that the New England Fund implemented in 2005. The Central States Fund requires an eight percent increase in pension contributions each year.

The new requirement is so steep that the recently completed UPS and Freight contracts don’t meet the 10 percent standard—despite record pension contribution increases of 65 cents a year.

The New England Fund took this into account and allows any new contracts that include increases of 65¢ an hour over and above a current pension rate of $5.26 an hour to meet the new requirements.

Challenges in Bargaining

The new rules will create serious challenges for Teamsters in contract talks.

Healthcare costs are on the rise, and fuel prices are skyrocketing. At the bargaining table, we will face the triple challenge of negotiating record pension contributions, higher health and welfare contributions and wage increases to keep up with the rising cost of living.

All this, in the context of a recession.

Teamsters in New England need to get ready for tough bargaining and be prepared to get involved in contract campaigns if we’re going to protect our pensions and healthcare and win the wage increases we need to keep up with the cost of living.