Hoffa Announces He Will Cut Central States Deal

Chief negotiators James Hoffa and Ken Hall issued a statement today announcing they will let UPS break 42,000 Teamsters out of the Central States Pension Fund in an early deal to be inked by October 1.

Then the issue will be in the hands of working Teamsters at UPS.

This is an issue that will affect every Teamster—not just UPSers. Every Teamster who is concerned about the future of our union’s power and our benefit funds need to make their voice heard and to call on local officers to take a stand to defend our union.

You can help make that happen by distributing this information to Teamsters where you work and at union meetings.

A hard-core sales job, by both the company and the union, is on the way. UPS Teamsters need to be prepared to evaluate any early settlement carefully and scrutinize the impact it would have on both our benefits and working conditions.

Click here if you can help us alert other Teamsters and to send us your thoughts on this issue.

Click here to download the latest bulletin from Make UPS Deliver.

Click here to download the latest Central States Pension Update from TDU.

Central States Pension Grab

UPS has been gunning for more control over our pensions for years. This year, they are taking a more incremental approach by focusing on Central States. If they get their foot in the door there, the company will target other Teamster funds in the future. Other Teamster employers will follow suit, including ABF and others.

We can expect plenty of bait to get Central States Teamsters to swallow the hook, including:

• Higher pension benefits than what Central States currently offers
• Real 30 & Out benefits (no 6 percent annual penalty for retiring before age 62)
• More affordable retiree healthcare

That’s what UPS will dangle to get working Teamsters to take the bait. The hook will come later when UPS caps future pension increases going forward. UPS stands to save billions of dollars over the long-term by reducing future benefit costs. That’s what the company’s move against Central States is all about.

That’s why UPS management will offer approximately a $6 billion payment to withdraw from Central States. UPS management knows they will make up these billions and more by paying working Teamsters lower benefits in the future.

A drug dealer is always willing to sell you your first score on the cheap. They know they’ll make it up many times over once you’re hooked.

We can win improved benefits and affordable retiree health care without letting UPS split the pension fund. Our union took that united position in 1997 and we won record pension increases.

Working Conditions at Stake

One danger for UPS Teamsters is that the Central States pension issue will overshadow the many contract issues affecting UPSers’ daily working conditions.

In surveys and contract meetings, working Teamsters at UPS made it clear that UPS should not get an early agreement unless it includes:

• Real protection from excessive overtime
• Strong language to ensure compliance with 8-hour requests
• Higher wages—especially for part-timers and combo workers
• Fairness for combo workers—including stronger bidding and seniority rights.
• Increased penalties for supervisors working
• Protection from unfair discipline based on new UPS spying technology
• A minimum of 10,000 new full-time jobs

UPS is prepared to spend billions to push through its pension grab and distract us from the critical language issues that determine the quality of our work lives.

The pressure is on the company, not us, to settle early. We need to win the improvements that we deserve or we will suffer the consequences for another five years.

Hoffa and Hall Shill the Company Plan

It’s obvious why the company wants to destroy Central States, but why are Hoffa and Hall promoting this short-sighted deal?

They claim that actuaries hired by the union say that breaking up the Central States Fund is the “only option.” Are these the same actuaries who promised that the “Best Contract Ever” would protect our benefits for the life of the 2002 agreement?

These actuarial studies are paid for by members’ dues—so why isn’t this information made available to Teamster members so it can be independently verified? Instead, UPS Teamsters are kept in the dark and told to take Hoffa’s word for it. That’s what we did with the “Best Contract Ever” promises.

In 2002, Hoffa and Hall gave away the 30 & Out benefits that we fought for decades to win—and secured in our 1997 strike victory. Now they are poised to give away the rest of that victory by giving up the Central States Pension Fund.

Concerned Teamsters Need to Act Now

An early deal is on the way and so is the biggest sales job ever. We need to prepare our fellow UPS Teamsters to carefully scrutinize any early settlement—and consider its long-term consequences, not just the short-term improvements.

This is an issue that will affect every Teamster—not just UPSers. Every Teamster who is concerned about the future of our union’s power and our benefit funds need to make their voice heard and to call on local officers to take a stand to defend our union.

You can help make that happen by distributing this information to Teamsters where you work and at union meetings.

Leading up to the settlement, TDU and the Make UPS Deliver campaign will be producing informational bulletins. When a tentative deal is reached, we will publish a detailed analysis so UPS Teamsters can make an informed decision.

Remember, the ‘Best Contract Ever’ sounded good in the short term too. Hundreds of thousands of Teamsters paid the price through benefit cuts and diminished member confidence in our union.

We can’t afford to let history repeat itself.

Click here if you can help us alert other Teamsters and to send us your thoughts on this issue.

Click here to download the latest bulletin from Make UPS Deliver.

Click here to download the latest Central States Pension Update from TDU.

August 23, 2007: The assets of the Central States Pension Fund are on the rise and our union will lose long-term power in dealing with management if we let UPS split from the fund. Those are the findings of pension experts and industry observers according to areport in this month’s Traffic World magazine.

That’s exactly why our union should reject UPS’s bid to break up the Central States fund. Instead, we should be negotiating benefit improvements that will immediately restore affordable healthcare and provide a roadmap to higher pension benefits as Central States continues to improve.

Consider these facts reported by Traffic World, a leading industry publication read by shippers and investors:

• “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—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 come from the June Central States Fund’s Financial and Analytical Information report—and they have pension experts optimistic.

UPS Teamsters who suffered pension cuts and saw our fund’s assets drop might wonder, “What’s happening here?” Part of the answer is that the 2003 benefit cuts helped restore the fund’s assets. But pension experts also say “Multi-employer funds usually run in cycles.”

“They’re working their way back,” from the post 9-11 stock market slump, says pension expert Michael Cagnina, who manages $199 billion in pension assets for nearly 500 clients.

UPS wants to break out of the Central States plan to save billions in benefit costs—a move that would reduce our union’s long-term power in dealing with the company.

“It is the Teamsters’ pension—and particularly the multiemployer plan—that gives the union much of its draw and power,” industry analysts told Traffic World.

“It would take away from the union’s voice—the workers’ voice,” pension manager Michael Cagnina said.

Click here to read the entire report from Traffic World.

August 23, 2007: “It is the Teamsters’ pension—and particularly the multi-employer plan—that gives the union much of its draw and power, industry observers say.” —Traffic World Magazine, August 17, 2007.

Every Teamster officer should know that, and most of them do. So why isn’t there a huge outcry from our union leaders against UPS’s move to split the Central States Pension Plan?

Where are the leaders in the Freight Division and our International Vice Presidents?

Where are the heads of Joint Councils and local unions within the Central and Southern Regions?

The silence from the Teamster leadership is deafening. Why is it left to TDU, the reform movement, to lead the fight in basic defense of our pension plans?

Most Teamster officers know that letting UPS leave the Central States fund will weaken our union’s power against management and hurt our members —but they remain silent. There’s a word for this silence: cowardice. This union was not built on fear. It’s time for officers to stand up and be counted.

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