April 17, 2008: Teamsters for a Democratic Union is a movement of Teamsters who want to make our union stronger and more accountable to working and retired Teamsters.

We believe our pension funds belong to the members and are a key element of Teamster power and Teamster pride.

We work to support and strengthen our Teamster pension funds. We work to defeat employers’ moves to break out of pension funds, and other corporate attacks on good pensions for working America. We fought the passage of the Pension Protection Act (PPA) because we knew the problems it would cause our funds. We opposed the move by UPS to split the Central States Fund.

We take legal action to defend pension rights. We successfully led the fight to loosen up unfair “reemployment rules” in the Central States Fund. We have gone to court to defend members’ pensions and to hold pension trustees accountable to the members.

We work to enforce the members’ Right to Know. We successfully lobbied for the positive part of the Pension Protection Act, which requires funds to provide more information to members. We successfully sued the Central States Fund to require them to provide (previously secret) quarterly financial reports. We hold educational programs for Teamsters on our funds and our pension rights.

We helped lead the battle to win 25-and-out and 30-and-out benefits for hundreds of thousands of Teamsters. Now we are working to defend those benefits. Recently when the Local 804 fund tried to eliminate 25-and-out for new hires, TDU members and other Teamsters organized and stopped that give-away.

If you are concerned about your Teamster pension, we invite you to join TDU. We are Teamsters working together to protect our pensions and our union for the future.

Click here to join TDU today.

April 9, 2008: After two months of demanding more information about the pension cuts in Local 355, members are finally getting some answers.

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

Last weekend, Local 355 President Denis Taylor told the membership meeting that he personally expected benefits to improve in one year. When the cuts were announced in February, Taylor told members that the cuts could last three years or more. However Taylor also said the fund’s investments are down by about 6 percent already this year.

Taylor did not say how much he expected the benefits to be improved.

Since February, members have been demanding to know when the benefits will be improved—and what the local’s plan is to improve and protect the pension fund.

Several Teamster funds have lowered pension accruals, but cutting the accrual to zero is an extreme step.

Members Get Pension Info

Baltimore UPS feeder driver Gary Payne has obtained the Actuarial Valuation of the Local 355 fund. The report is a detailed look at the fund by independent actuaries.

In this document, prepared late last year, the actuaries warned the Local 355 fund trustees that the fund would be in the Red Zone by the end of March 2008 if the fund did not take action.

Under the Pension Protection Act, every pension fund will issue a report to members this year informing members of its funded status. Being in the Red Zone means the plan must adopt a funding improvement plan. With these cuts, Taylor says the fund is now in the Green Zone, which means the plan is well-funded.

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 Protection Act, which gives members the right to inspect certain plan documents.

“Any plan to start turning around our fund has to start with giving members more info about how the fund is doing,” Payne said. “We should have gotten this news sooner.”

The valuation does not recommend how big the cuts should have been, nor does it say how long cuts should last.

See the report for yourself. Click here to download the Local 355 Actuarial Valuation.

Stay in the loop. Click here to sign up for pension updates from Teamsters for a Democratic Union.

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 14, 2008: Trustees in the Maryland Local 355 Pension Fund have cut the fund’s annual accrual rate down to zero.

Last year, a UPS Teamster in the Baltimore fund earned an accrual of $191. But effective March 1, Local 355 members in the pension fund stopped earning any additional increase to their pension.

Denis Taylor, the head of Local 355, will not give members a timeline for when the freeze will end.

"Over 150 people came out for our meeting to discuss the pension, and many members spoke out against the freeze," said Gary Payne, a UPS feeder driver. "Members are demanding to know when our benefits will be restored, but our officials won’t give us straight answers."

The Local 355 plan covers over 3,500 around Baltimore. Teamsters on Maryland’s Eastern Shore are covered by a separate plan that has also seen cuts in recent years.

Fund in the Green Zone

At the union meeting, Taylor told the members that the fund is now in the "Green Zone", thanks to the pension freeze. Without the freeze, the fund would be in the "Yellow Zone", Taylor said.

Under the Pension Protection Act, every pension fund will issue a report to members this year (for most plans it will be in April) informing members of its funded status. The "green zone" means a plan is well-funded. The "yellow zone" means the plan is less than 80 percent funded and must adopt a funding improvement plan. Currently, the Local 355 plan is 81 percent funded.

Local 355 officials told members that the fund would have problems by 2009 if they did not cut the accrual to zero now.

Several Teamster funds have lowered pension accruals, but cutting the accrual to zero is an extreme step.

Officials are blaming the cut on the poor performance in the stock market since 9/11. Over the last eight years the fund has earned an average of 6.1 percent returns—less than the fund’s 8 percent target.

But for the last four years, the fund has averaged an 8.3 percent return—a little above the target.

Members are left wondering why these cuts are coming now, even though the biggest employers—UPS and freight—will be paying a good bit more into the fund starting Aug. 1.

"Last year, when we were voting on the new UPS contract, Denis Taylor came down to our center and told us to vote Yes for the contract," Payne said. "He told me personally that the money in the new contract would be enough to prevent a cut. He should have had a plan to protect our benefits; instead all he gave us was a sales job."

Members Launch Petition Drive

Concerned members have launched a petition drive to get answers and restore their benefits.

Members are getting signatures on the petition to demand to know what the union’s plan is to restore the cut.

You can help build the movement to restore our benefits by getting other UPSers to sign the petition. Click here to download the petition.

Click here to download a flyer you can post and distribute to other Local 355 Teamsters.

Stay in the loop. Click here to sign up for pension updates from Teamsters for a Democratic Union.

Please Note: You have the right to distribute flyers and get petition signatures on company property. You must only pass out flyers and get signatures in non-work areas during non-work times. If you’d like more information about your rights on the job, contact Teamsters for a Democratic Union at (718) 287-3283.