August 23, 2007: If UPS or ABF or any other corporation says they will do better than a $3,000 pension at 30 years, keep in mind that with the increased funding, that’s not hard to do. The Central States Fund is paying that now—and will be paying a lot more in a few years.

A Teamster under the national contracts, or contracts with similar pension contributions, now accrues $132 per month pension for each year of service. And in four years, that accrual will be at least $174 per month pension for each year of service. And going up each year after that.

Those amounts are only payable in full at age 62, because of the cuts Central States imposed at the beginning of 2004 in 30-and-out benefits. For each year under age 62 that a Teamster retires, that amount is cut by six percent. For example, if you retire at age 58, you have to cut that amount by 24 percent.

So if you retire at 58 this year, you lose 24 percent of that $132 and get $100 for this year. But in four years, you can retire at 58 and accrue about $132, which is 24 percent off of $174.

Timetable to Restore Teamster Benefits

TDU is urging all Teamsters to demand that the trustees of Central States give us a timetable or benchmarks that lead to restoration of unreduced 30-and-out pensions that our union fought hard to win. We should not settle the UPS contract without the immediate restoration of affordable healthcare and a roadmap for eliminating the six percent early retirement penalty.

Our pensions are going up. There is more money going into the fund, lots more. A few years ago the Central States took in $1 billion per year from employers. Now it takes in $1.5 billion and in four years it will reach $2 billion. The assets of the fund are going up.

So if UPS or ABF or any other employer tells you about some great pension they will offer, keep in mind that they may be comparing what they’ll give you in the future to what you can get now in the Teamster pension plan.

UPS’s first pension offer included a $3,000 a month after 30 years of service. In four years, the Central States plan will pay $5,220 a month for a new Teamster who puts in 30 years of service.

We need to be smart, check the numbers and not fall for a corporate sales job—especially with the future of our pension funds and union at stake.

August 23, 2007: Sometimes, your vote is your voice. But on the issue of splitting UPS from the Central States Pension Fund, you won’t get a vote, unless you work at UPS.

Because this could weaken our whole union, you should make your voice heard. Go to your September union meeting. Ask your local union officers to take a stand to defend our master contracts, and our Teamster pension plans.

We want stronger pension funds and improved benefits. We want all Teamsters united in solidarity.

Your voice is your vote.

August 20, 2007: Industry experts say that pension assets are up, but our union’s power will be down if UPS is allowed to break out of Central States.

Industry experts report in this month’s Traffic World that the assets of the Central States Pension Plan are on the rise. They warn that the Teamsters Union will lose long-term power in dealing with employers if we UPS split from the fund.

Traffic World is a leading industry publication read by shippers and investors. Its latest report on UPS negotiations concludes that:

"It is the Teamsters’ pension—and particularly the multiemployer plan—that gives the union much of its draw and power…Wages at nonunion competitors are comparable. It’s the promise of long-term security that will get and keep union members." (Traffic World, 8/17/2007)

The stakes couldn’t be higher as our union bargains with UPS over the future of our pensions.

The good news is that Central States assets are on the rise according to the report.

• "The Central States Pension Plan shows significant increase in assets" with an estimated "$700 million increase in assets through the first six months of the year."

• "Central States’ total assets—about $21.4 billion—would represent a significant increase over the $18.7 billion reported by the fund in 2005…The total could tally $22 billion by the year’s end."

• "The ratio of active Teamsters to retirees has almost stabilized. There are 212,000 retirees and 146,000 active (full-time) Teamsters."

These figures, all of which come from the June Central States Funds Financial and Analytical Information report, have pension experts optimistic.

"They’re working their way back," says pension expert Michael Cagnina, who manages $199 billion in pension assets for nearly 500 clients.

Industry observers say that a withdrawal by UPS from Central States would undermine our union’s power and appeal to nonunion workers—and pension analysts agree. “It would take away from the union’s voice—the workers’ voice,” Cagnina says.

Click here to read the entire report from Traffic World.

Click here to see the fund’s latest Financial and Analytical Report. Note that this report is only available because TDU members went to court and forced the fund to reveal this information, which TDU makes available to participants.

August 13, 2007: The assets of the Central States Pension Fund have jumped $700 million in the first six months of this year, reaching $21.4 billion, and could reach $22 billion by the end of 2007. This is according to the fund’s latest Financial and Analytical Report, obtained by Teamsters for a Democratic Union.

Now is the time to restore affordable retiree health and welfare and get a timetable for improved pension benefits, in the current round of national negotiations. The facts back this up.

At the end of 2003 the Central States Fund was down to $15.3 billion in assets. Fund assets have grown by 40 percent in 3 and a half years.

As of Aug. 1, the Fund is now taking in even more money, because the 70¢ per hour benefit increase in the national contracts was split 40¢ to pension and 30¢ to health and welfare. This new pension money means that a Teamster who works all year under the freight, UPS, carhaul or pattern contracts now accrues $132 per year in retirement benefits. For the first time in four years, some of the benefit money is going to into the health and welfare fund.

The report also reveals that the ratio of active Teamsters to retirees has almost stabilized. There are 212,000 retirees and 146,000 active (full-time) Teamsters, numbers very similar to last year.

The Fund is taking in more money in employer contributions than last year, while paying only slightly more in benefits. Employer contributions are up at an annual rate of about $172 million per year over last year. That explains some of the growth in assets; another big factor is the fund’s healthy return on investments.

While the pension fund is still seriously underfunded, the situation is on the upswing. This is the time to start to expect improvements: first in retiree health coverage (which is provided by the health and welfare fund), and later in pension benefits.

Teamsters can demand full restoration of affordable retiree healthcare in the current contract round. We demand guaranteed increases into the health and welfare fund to support this. No excuses.

Teamsters can demand a timetable for restoring and improving pension benefits.

Teamsters can unite to protect the Central States Fund from UPS management’s plan to split it. The loss of 43,000 active UPS Teamsters would badly hurt the fund’s ratio, and would not benefit UPS Teamsters a bit.

Click here to see the fund’s latest Financial and Analytical Report.

Note that this report is only available because TDU members went to court and forced the fund to reveal this information, which TDU makes available to participants.

August 3, 2007: by Thomas L. Gallagher, for Traffic World: UPS reached an agreement in principle with the Central States Pension Fund establishing conditions for a potential UPS withdrawal from the multi-employer pension plan.

The controversial decision to remove 42,000 workers covered under the plan would set the stage for establishing a jointly administered Teamster pension plan for UPS employees. Such an agreement must first gain acceptance by the Teamsters National United Parcel Service Negotiating Committee and ratification by the members.

The Teamsters committee said they will not accept a proposal for UPS to withdraw from Central States unless they are satisfied that it would be in the best interest of all Teamsters who are participants in that Fund, not just the UPS employees.

Specific terms of the agreement have not yet been disclosed.

"While we await official notification of the terms of the settlement, we continue to evaluate the effect on the future of Central States," said James P. Hoffa, chairman of the committee and president of the union.

A dissident group within the International Brotherhood of Teamsters is calling for organized resistance to any withdrawal from the Central States Fund. Teamsters for a Democratic Union said a pension pullout by the union's largest employer would undermine the retirement security of all Teamster members.

The group compared Central States with two jointly administered programs in New York and New Jersey, where UPS has successfully pushed for pension cuts. "Both the New York and New Jersey funds have underperformed compared to the Central States Fund," said TDU in a statement.

Loss of contributions to Central States would also gravely weaken it and endanger the benefits of 100,000 non-UPS Teamster members still covered, said TDU.

July 18, 2007: Some defenders of management’s pension proposal claim that a $4 billion withdrawal liability payment from UPS would fix Central States and safeguard members’ benefits. Unfortunately, that’s just not true.

Find out why at www.MakeUPSDeliver.org

July 12, 2007: In June ABF CEO Bob Davidson circulated a letter to all Teamster employees saying that members should dump their Teamster pensions for a company 401(k).

The letter is supposed to be a sales job for the company’s effort to break out of our Teamster pension plans. Instead, it reveals that it would be a disaster for our union to let employers like ABF and UPS to take this course.

An 18-year Teamster wrote Davidson about the company’s proposal. And the CEO’s advice is telling. Don’t worry about losing your pension, Davidson says. Under ABF’s proposal, you would still get your 18-year pension from the Teamster fund—plus start building a 401(k) on top of that pension. It’s “not like Social Security,” Davidson writes, but your very own account.

What Davidson failed to mention is that with 18 years in a pension fund you don’t qualify for anything but a vested pension, which in most Teamster plans amounts to very little.

ABF’s pitch boils down to this: put your future in the hands of the company’s 401(k) and pray that the stock market goes way up. It might work. Then again, the lottery might work, too. You just have to pick that lucky number.

UPS Pullout Could Cause Fund’s Collapse

At least ABF management is up front about their goal: saving the company money on retirement costs. And Davidson is honest enough also to admit what would happen to Teamster pension funds if UPS and ABF pull out.

“A UPS withdrawal, or other adverse factors, would make them even less stable or cause their complete collapse,” Davidson wrote.

Our union needs to say one short word to these corporate schemes: No. The American people have said No to privatizing social security, and we need to tell UPS and ABF the same now, in a strong and unified voice.

The corporate answer is to destroy our Teamster funds to save management money on retirement costs. The union answer is to protect our retirement security by sticking together, strengthening our union funds, and winning benefit improvements.

UPS-Only Plans Cut Benefits

UPS management is pushing their own pension scheme which starts with busting 42,000 UPS Teamsters out of the Central States Fund. Management wants to establish a new UPS-only fund, with half corporate directors and half Teamster officials on the board.

UPS Teamsters don’t have to guess how a UPS-only plan would work. Two large funds exactly like this already exist. They cover all the full-time UPS Teamsters in New Jersey and the New York City areas. Both funds are housed right inside UPS headquarters in Atlanta.

UPS has a track record at these funds—and it should raise alarm for Teamsters concerned about our retirement security.

Management recently demanded big pension cuts in both. They got their way in New York, and slashed pension accrual rates by 30 percent. In New Jersey the union blocked the cuts, so management has pushed the issue before an arbitrator.

The New Jersey fund is only 52 percent funded, by the way. That’s less than Central States. The return on investment in the New York fund was just 3 percent over the past five years and just over 6 percent for the last ten years. That’s much worse than Central States.

These are UPS-Teamster plans just like the company wants to set up for 42,000 Teamsters in the Central States. And they are cutting benefits. This puts the lie to the company’s claim that you would be better off in a UPS-only plan.
Promises are cheap. The results speak for themselves.

The Positive Alternative

Hoffa’s “Best Contract Ever” and the post 9-11 stock market dip delivered pension cuts. But the recent bull stock market has boosted our pension plans and positioned us to win realistic benefit improvements. That should be the priority for this bargaining round at UPS and in freight.

Affordable retiree healthcare. We have an additional 70 cents per hour in benefits due on August 1 in our national contracts. Early bargaining at UPS can let us get a lot more, enough to pay for retiree health care at affordable cost.

A written timetable for improvements in all pension plans. We need a guarantee, in writing, so all Teamsters will know that our pensions will be restored and improved as increased contributions build up in the funds. In 1997, UPS Teamsters got a binding document from Central States before we voted on the contract. We should settle for no less.

Include UPS part-timers in all Teamster pension funds. Part-timers are already covered by Teamster plans in the West, New England and Upstate New York. This will improve pensions for both part-timers and full-timers and be a big boost to the Central States and other funds, bringing in thousands of new participants.

These are realistic goals. There is no reason to give UPS an early deal without them.

June 28, 2007: At a press conference today, Senator Tom Harkin (D-Iowa) introduced the Restoring Pension Promises to Workers Act of 2007, which contains a number of provisions “to help ensure Americans’ pensions will be there for them when they retire.” For one, the bill would create an Office of Participant Advocacy, which would be a resource for people who are affected by shortcomings in the laws. The bill also includes a provision that would require companies that provide extravagant executive pay packages to maintain a defined benefit pension plan for their workers. There are also protections for employees whose divisions are sold, certain retired union members affected by pension cutbacks, and spouses of federal employees. Read Senator Harkin’s press release. Karen Friedman, PRC Policy Director, spoke at the press conference in support of the bill. Read her statement.

To read the full article, click here.

June 26, 2007: Logistics Management says there is good news for shippers in our union's current round of bargaining with UPS, and in the upcoming NMFA negotiations. "There is scant chance of a national strike as happened 10 years ago when Teamsters walked out against UPS and when they struck the LTL sector in 1994."

The article notes that Ken Hall is "seriously considering" UPS management's proposal to split up the Central States Pension. "That’s a far cry from the union’s stance in 1997 when UPS offered basically the same deal, and it resulted in a 15-day national work stoppage. But that was when Ron Carey was running the 1.3 million-member Teamsters now run by James P. Hoffa. The union has never had a national strike in transportation under the younger Hoffa."

Click here to read the full story at the Logistics Management website.

June 18, 2007: By John Gallagher, for Traffic World - Pension benefits are in play as never before in the current round of negotiations between UPS and the International Brotherhood of Teamsters, and the future of LTL giants YRC Worldwide and Arkansas Best - as well as UPS's own freight division - may hang in the balance.

When the $48 billion parcel giant inked its last deal for 230,000 union drivers in 2002, it had hoped to be able to celebrate its 100th anniversary this year without the diversion of contract negotiations.

But now both sides are hoping to lock in a new contract as early as the end of the summer, according to industry sources, and avoid anything close to the 14-day strike in 1997 that threw a massive wrench into the trucking market as shippers scrambled to find capacity and rival carriers were deluged with diverted freight.

UPS is adamant that the parcel contract, which expires July 31, 2008, is being negotiated at the same time but separate from a new contract being created for UPS Freight covering 125 employees in Indianapolis, a terminal where workers voted to organize. However, some believe one UPS unit is being used as leverage against the other.

"There's going to be some sort of a trade-off involved with UPS Freight, absolutely," said Jason Seidl, an analyst with Credit Suisse. "Exactly what form that may take, who knows. But I think it's a chip that UPS management can use to help negotiate part of the (parcel) contract, whether it's related to working conditions, salary, or the pension fund."

The early start to negotiations this year has reduced the risk of a work stoppage, but hasn't kept rival carriers and their customers from drawing up contingency plans. UPS moves 15.6 million packages through its system each day, with 13.8 million flowing over the roads, on the rails and through the air of its domestic shipping network.

"(During the strike) in 1997, we got a huge surge of freight - but then again a lot of carriers did," said Con-way spokesman Gary Frantz. "Back then, people were unsure whether UPS could handle the strike. We''re more confident this time around."

While both sides took credit for a "win" in 2002, the labor landscape may have changed enough over the last five years to put UPS management more firmly in the driver''s seat in 2007.

"If you look at other unionized companies like the airlines and the auto industry, they've either downsized, gone through layoffs or renegotiated their contracts over the last five years," said Satish Jindel, a principal with SJ Consulting Group.

"Wages in the airline industry are easily 20 percent lower. While it''s desirable for unions to have decent wages for decent work, they have to recognize that a lot of people are working for less. So for them to push the cost structure of UPS higher, it could undermine the goal of protecting or growing their jobs."

Jindel also noted that besides rival FedEx - the largest express carrier shippers could turn to in 2002 in the event of a snag in negotiations - there was Airborne Express. "Now there''s DHL, and Airborne didn't have the global network that DHL has, or the access to capital that DHL has," he said. "As a result, if there''s a delay in contract execution, and shippers start to move business away, the company will be at risk of seeing that business go away permanently."

The basic matters of wages and work rules are taking a back seat so far to the longer term issues surrounding pension funds in the current round of negotiations, which kicked off in Detroit last September.

Agreeing to place multiemployer pension funds on the negotiating table is evidence, say some industry observers, that Teamsters President James P. Hoffa acknowledges his union may not be playing with as strong a hand as in previous years.

The largest of the Teamster multiemployer pensions, the Central States Southeast and Southwest Areas Pension Fund (commonly called Central States), was only 49 percent funded at the end of 2005, with roughly $21 billion in assets as of the first quarter 2007.

Because an estimated 60 cents of every dollar that UPS contributes to the pension fund cover the retirement benefits of non-UPS employees, the company has proposed - according to the Teamsters - paying a lump sum withdrawal liability owed to the Central States pension fund, an amount subject to negotiation between UPS and the pension plan.

Retirement benefits would thereafter be administered by a new joint Teamsters-company pension plan with an equal number of Teamster-appointed and UPS-appointed trustees.

"I can assure you that the negotiating committee will not consider any plan that jeopardizes the benefits of members in Central States or members of any other Teamster fund," said Ken Hall, director of the Teamsters Parcel and Small Package Division and co-chairman of the UPS national negotiating committee.

"The company's proposal is not a negotiating tactic. It is a serious proposal that must be seriously evaluated and compared with the other options available for improving and protecting the pension benefits of our members."

But not all Teamsters agree that management is holding the best cards. Teamsters for a Democratic Union, a grassroots group based in Detroit, believes the Teamsters are still reaping the fruits of a "very successful strike" in 1997. "That still gives us added bargaining power as a union," said TDU national organizer Ken Paff. "We're saying to the union leadership, use some of that power to drive the company demands off the table and put the union demands on the table."

According to TDU, some of those demands should include adding 15,000 new full-time jobs, wage increases and better health care benefits.

"The union could tell the company that if they want early ratification, they have to withdraw the pension proposal, or we'll see you next year," Paff said. "If they were to do that, the TDU as well as the rest of the UPS Teamsters would rally behind them."

Some speculate that one way UPS Freight could be used as a bargaining chip in the current negotiations would be to agree to a card check at all 300 service centers in UPS Freight''s network - in exchange for agreeing to get out from under the multiemployer pension fund. It has been estimated that it would still cost UPS anywhere from $4 billion to $10 billion to payoff its pension obligations under the fund.

"UPS is pretty smart, and if they look at the numbers and it made sense, they'd jump at it," said Art Hatfield of investment firm Morgan Keegan. "It might not be a good deal for the Teamsters, but it would be great for UPS. They've got a lot of cash, and even if it was an $8 billion or $10 billion hit and they had to raise debt to pay it, they''d be swapping out an uncertain liability for a certain one. That would be a positive change to the balance sheet."

Meanwhile, YRC and Arkansas Best, which will be renegotiating the National Master Freight Agreement with the Teamsters later this year, are keeping close tabs on UPS and whether it is successful in negotiating its way out of the pension fund.

"We'll be bargaining with the same group, and UPS is participating in all the same pension funds we are, so it will certainly be of interest to us," said Mike Smid, president and CEO of YRC National Transportation.

According to Securities and Exchange Commission documents, YRC contributed $542 million to the pension plans last year, up from $472.7 million in 2005 and $378 million in 2004. The company estimated its full withdrawal liability to be $3 billion to $4 billion, payable over 20 years.

"Yellow Transportation, Roadway and the applicable subsidiaries of Regional Transportation have no current intention of taking any action that would subject us to withdrawal obligations," the company said in an SEC document filed earlier this year.

However, at a conference hosted by Bear Stearns May 8, YRC Chairman, President and CEO Bill Zollars said he considers the multiemployer pension plan "an investment like any other investment," and negotiating a deal to exit the plan "all depends on how much we put in and what we get back for it."

At the same conference, Arkansas Best President and CEO Robert Davidson was more explicit.

"We can provide the same benefits that we're providing now directly to our employees at significantly less cost than we're now paying. That money would allow us to amortize the withdrawal liability that we would pay to the funds, and would lower our operating ratio to allow us to be even more competitive in the marketplace."

ABF estimates it would cost the company $600 million to $650 million to withdraw from the plan, payable over a 10- to 15-year period.

"We have the capital structure to allow us to do it, so the plan is to pursue that aggressively, and hope Yellow and Roadway are on board with us for it," Davidson said.

Whether or not UPS Freight is used as a bargaining chip in the negotiations, Wall Street believes UPS Freight will eventually be organized.

"We continue to believe that the model contract worked out with Indianapolis will not include restrictive work rules like the National Master Freight Agreement, allowing them to operate as they always did as a nonunion carrier," said Stifel Nicolaus analyst John Larkin.

"Wages and benefits should go up, as the carrier is unionized, but UPS, as the largest employer of Teamsters in the world, will more than offset any labor cost disadvantage with added density and improved efficiency."