May 9, 2007: Ken Hall has promised that the UPS contract will improve pensions and send a message to all employers that our union won’t stand for pension and benefit cuts.
“Pensions are the number one issue for our members. We’re going to focus on improving their pension. Because after all, it’s the members that drive these negotiations, it’s their issues and that’s what we’re going to be guided by.”
- Ken Hall, IBT Parcel Director
“Once we’re finished with these negotiations, the message to other employers where our members are represented should be, ‘If you mess with our members’ pension and benefits, you’re going to get the shit kicked out of you by the Teamsters.’”
Ken Hall, IBT Parcel Director
Is it real, or is it just talk?
Members are hoping for the best. But we’ve heard big talk before. In 2002, we were promised that the UPS and freight contracts would protect our benefits. Then we were hit with the worst cuts in Teamster history. We were lied to.
It’s Up to Us
It’s up to Teamster members to make sure we don’t settle short again.
At the recent Teamster “Unity Conference” in Las Vegas, Hall announced that our union will reach an agreement with UPS “soon.”
Management wants an early agreement, to reassure shippers and stockholders. Will our union use this bargaining leverage to win the pension and benefit improvements we’ve been promised?
Hoffa has promised that this UPS contract will be the richest one ever—and that’s one promise he will keep. The company’s record profits and new pension rules mean UPS will set a new record for benefit contributions.
But what will these record contributions mean to working Teamsters? What cuts will be restored and what improvements will be won?
May 9, 2007: Teamsters in the Central States were told that the 2002 “Best Contract Ever” would protect our benefits for the life of the contract. Instead that agreement gutted early retirement in the Central States by slashing the pension accrual rate in half and raising the cost of retiree healthcare to as high as $1,200 a month.
If we’re going to give UPS an early deal, we need to restore benefits that we’ve lost.
A new rule set by the fund requires that all new contracts must contain at least an eight percent increase in pension contributions every year. This means at least $2.40 an hour will go into the pension fund over the next contract, probably a good bit more. Contributions to the Central States Pension Fund will reach $8 per hour during the next contract.
The question is what benefits will be restored?
In Central States, the easiest benefit to restore is affordable retiree healthcare. These benefits were slashed because of one fact: money designated for our health benefits was diverted for three years in a row to the pension fund.
As a result, Teamster members are being prevented from retiring at 25 and 30 and out.
The next contract has to undo the damage that was done by the Best Contract Ever.
We need to substantially increase contributions to our Health and Welfare Fund so that our health benefits are protected and affordable retiree healthcare is restored.
If our negotiators do their job, UPS Teamsters in the Central States can have retiree health benefits for $50 a month, just like we had prior to the cuts.
Pension Accrual and Early Retirement
Our pension accrual has been cut in half, and our early retirement plans cut out. Teamsters need a written agreement—not a worthless promise—that our pension benefits will be phased back in as increased contributions build up in our fund.
In 1997, UPS Teamsters got a statement from Central States—before we voted on the contract—telling us in writing what our benefits would be if we ratified the contract.
After the broken promises of 2002, we need to demand it in writing this time.
We need to restore retiree healthcare in full, and a specific timeline for restoring our pension benefits.
Without these gains, why would we vote to approve an early deal? We can hold out and bargain for more.
May 9, 2007: Hundreds of thousands of Teamsters covered by the Western Plan are still facing a nearly 40 percent pension cut even though the fund is 100 percent funded.
The Western Fund will be even more flush after the UPS agreement. UPS will be required to increase its contributions by at least eight percent a year in Central States, and the West will get the same. By the end of the agreement, UPS will be putting $8 an hour into the pension fund.
What will this mean to UPS Teamsters in the West? The “Best Contract Ever” and the pension cuts that followed reduced the monthly pension benefit by $500.
Will record contributions in the West fully restore the pension multiplier to the historic minimum of 2.2 and 2.65 for all Teamsters with twenty or more years? Will the multiplier go higher or will the fund increase benefits by bringing back bonus years?
Keep in mind that more money bargained into pensions will likely mean a lower wage increase.
April 2, 2007: Since 2003, our Teamster benefits have been under attack. But the coming year gives our union the opportunity to take the offensive.
Our pension funds’ assets are already way up due to recent strong investment returns.
This opens the door to benefit gains if our union can win sufficient increases in benefit contributions in the 2008 UPS and freight contracts.
These contracts are sure to set records for benefit contributions, in part because new regulations in the Central States Pension Fund require all employers to increase their benefit contributions by a minimum of eight percent every year just to stay in the fund.
That means minimum increases of $2.40 over the next five years. —nearly 40 percent more than last time. Benefit contributions are negotiated nationally, so other funds will likely get at least this amount.
More will be needed to increase benefits in the Central States and many other funds as well. The question is, how much more and what is our union’s plan to win what’s needed?
Teamster members deserve answers to these questions. If we’re going to effectively unite to win our bargaining goals, we need to know what we’re fighting for.
Market Rebound Sends Teamsters Benefit Funds to All-Time Highs
The stock market recovery of the past few years helped send our pension funds to record highs. Central States is up to $21 billion, and the Western Conference fund is 100 percent funded.
2008 Contracts Will Set Records for Benefit Contributions
UPS’s record profits and new pension fund rules mean the company will pay record contributions in the next contract. The same holds true for the 2008 Freight Agreement.
Negotiations Can Add 100,000 New Participants to Our Benefit Plans
Union bargaining demands to win Teamster pensions for all UPS part-timers and UPS Freight employees would win better pensions and stronger benefit funds for all.
Funds Have Told Teamster Leaders What We Need to Bargain to Raise Benefits
Top Teamster officials have been given reports on what contract money is needed to guarantee and restore benefits. It’s time to tell the rank and file and unite around a plan to win.
Read More Pension Coverage:
April 2, 2007: UPS’s $4 billion profits and new pension fund rules mean the company will pay record contributions toward our benefits in the 2008 contract.
But our union has other bargaining demands that are just as critical if we’re going to beat the pension cuts and win better benefits.
Include All UPS Part-Timers in Teamster Pension Funds
Part-timers are already included in Teamster plans, including two of our strongest funds, the West and Upstate New York. Now our negotiating committee is demanding that ALL part-timers be included in Teamster funds.
This will put tens of thousands of younger Teamsters into our pension plans and add hundreds of millions of dollars in contributions every year. Contributions made for part-timers who leave before they are vested will go to help other Teamsters, not to fatten the company’s bottom line.
This change would also mean higher benefits for part-timers who stay on at UPS and go full time because their part time years will be worth much more—instead of the low reciprocal benefit they currently get.
Put UPS Freight Employees in Teamster Pension Plans
UPS employs around 15,000 nonunion drivers and dock workers at UPS Freight.
Unionizing these workers nationwide and bringing them into Teamster benefit plans would add some $180 million in pension contributions to our funds every year.
15,000 Full-Time Jobs
Every full-time job at UPS means more contributions and stronger pension funds. We need to create 3,000 full-time jobs a year in this contract, to strengthen our pension plans and bring full time opportunities to all UPSers.
April 2, 2007: The Central States Pension Fund ended 2006 with a $1.4 billion gain in assets, reaching $20.7 billion—up from just $15 billion a few years ago. The fund projects that by the end of 2007, assets will be up to $21.2 billion, with expected investment returns. With better returns, the Fund projects that they will surpass $22 billion.
These figures are in the fund’s Financial and Analytical Reports obtained by TDU in February 2007.
This big gain in assets at Central States shows the impact of benefit accrual cuts imposed on members, and diversion of money from health and welfare to the pension fund for the third year in a row.
In addition, 2006 was a good year for investors, with the Fund’s investments earning 14.5 percent.
What Will it Take To Restore Benefits?
Last fall, UPS chief negotiator Ken Hall met with representatives from the Central States and other Teamster funds to get briefed on what it will take to protect and improve our benefits over the life of the UPS contract. The same figures will apply to the 2008 National Master Freight Agreement.
To date, that information has been kept secret from the members.
In December, the fund informed all Locals that all new contracts negotiated must contain eight percent annual increases in pension contributions, or those members will be kicked out of fund participation.
This mean that in the UPS contract there must be pension contributions of at least 40¢ per hour the first year, then 50¢, and then 60¢ by the fifth year if the contract is that long. These are minimums required to stay in the fund, not to restore benefit cuts.
Members Launch Petition for Retirement Security
The new rule means that UPS and freight employers will pay record contributions in the 2008 contracts. But so far only top officials at the IBT and Central States (and management) know how much we need to bargain to improve our benefits.
Some Central States Teamsters at UPS have started a petition drive to demand this information and to stand up for our benefits.
The “United to Win Strong Pensions” petition states, “UPSers work hard and we deserve strong pensions, not cuts. We will not vote to approve any contract unless it delivers the retirement security we were promised in 2002.”
The petition puts forward a program that Central States Teamsters can unite around:
- Immediately restore affordable retiree healthcare
- Give Central States Teamsters a timetable for full restoration of the 2003 pension cuts
- Inform members in writing what our benefits will be before we vote on any contract
- Include part-timers in our pension fund to improve benefits for full and part-timers alike
- Reasonable reemployment rules adopted by the Central States Pension Fund
April 2, 2007: Assets at the Western Conference of Teamsters (WCT) Pension Trust now top $29 billion and the trust is 100 percent fully funded. But hundreds of thousands of Teamsters covered by the plan are still facing a nearly 40 percent cut in their pension multiplier. Why? And when will our pensions be fully restored?
The already-flush WCT Pension Trust is headed for another major influx of cash. In the next UPS contract, the company will very likely increase its pension contributions by a minimum of $2.40 an hour, assuming a five-year agreement.
That minimum figure is the result of a new Central States Pension Fund regulation that requires an eight percent increase in pension contributions every year just to stay in the fund.
Teamsters Losing $500/Month and Counting
Benefit contributions are negotiated nationally, so the Western Fund will likely get at least this amount also. That means contribution increases starting at a minimum of 40¢ per hour the first year and reaching at least 60¢ by the fifth year if the contract. That’s compared to just 35¢ an hour increases in the last contract.
In 2003, Teamster trustees, including General Executive Board members Randy Cammack, Al Hobart, Chuck Mack and Jim Santangelo, voted with employers to drastically slash the pension multiplier by more than half, to 1.2 percent, down from 2.65 percent.
These cuts have already reduced the pension check of UPS and Freight Teamsters by $500 a month for the rest of their retirement.
Trustees to the Western Fund voted to slightly raise the multiplier to 1.65 percent last October. But this rate still represents a 38 percent cut over the historic minimum rate of 2.2 percent.
The typical Western Teamster will lose another $100 per month off of their monthly pension check for every year the current cut remains in place.
Now Is the Time
The bad news for our pensions is good news for the employers. Our fund’s website features an announcement to participating employers that 100 percent funding means that they can withdraw their companies from the pension plan without having to pay any liability.
Working Teamsters get continued pension cuts. But a company that wants to bust out of our union’s largest pension plan can do so without paying a dime. What is wrong with this picture?
When the trustees slashed the pensions in 2003, they claimed it was because the stock market dip had caused the funding level to drop. The WCT pension trust was never less than 80 percent funded and thousands of Teamsters signed petitions saying the cuts were unnecessary.
Now there is nothing to debate. With the trust 100 percent funded and more cash on the way, the money is there to fully restore pensions in the West before working Teamsters lose another dime.
This issue affects the pocket-book of every Teamster. As long as employers can maintain pension cuts in the WCT Pension Trust, then Teamster members will find it that much harder to win pension increases in other benefit funds.
April 2, 2007: Commercial movers from Teamster Local 814 in New York City have been hit with healthcare cuts—following a concessionary contract that diverted millions of dollars in contributions from their health and welfare fund into their pension plan.
Under the terms of the 2005 contract, the $3.96 per hour contribution that was supposed to go into members’ health and welfare fund went into the Pension Fund instead.
“We said at the time that we were robbing Peter to pay Paul and that if we did not defeat these concessions we were going to be hit with healthcare cuts,” said Local 814 Teamster Eddie Freyta. “Unfortunately, we were right.”
Teamsters everywhere need to be on the lookout for this false fix to pension problems. It’s a poison pill,” Freyta said.
The cuts hiked members’ annual deductible and increased co-pays by more than double. Members will also be charged $100 for every emergency room visit
Employers have reportedly agreed to increase their contributions to the Health and Welfare Fund by $1.04 and hour. But Local 814 officials were unable to tell members if that increase was temporary or permanent.
For years, New York City moving companies shortchanged the Local 814 pension fund. They created tiers of casuals without benefits. They ignored contract language that required them to hire a certain ratio of casual employees (“industry men”) who receive contributions. They opened up nonunion operations.
Local 814 officials failed to crack down on these schemes. The employers profited by not paying pension contributions. After the stock market fell following September 11th, the pension fund faced a shortfall of tens of millions of dollars.
That’s when employers and Local 814 officials negotiated a deal to divert members’ health and welfare and annuity contributions into the pension fund to make up for the shortfall.
Members initially voted down the deal after a campaign by a rank-and-file committee Members for a Strong Contract. But the givebacks were ultimately ratified after a twenty day strike in which officials offered no plan to win.
“It was incredibly reckless what they did—and now members are paying the price,” said Walter Taylor, one of the movers who led the rank-and-file campaign to reject the contract. “We need to rebuild our local’s power—start to enforce our contracts, stand up to the employers, and organize the nonunion competition. Otherwise the cycle of givebacks is just going to continue.”
April 2, 2007: Healthcare costs are skyrocketing, putting union members on the defensive at the bargaining table. Local 559 Teamsters are doing something about it by joining forces with labor and community allies to fight for affordable, universal healthcare in Connecticut.
They won an important victory last month when the State Legislature’s Insurance and Real Estate Committee approved a bill for single payer healthcare.
The vote surprised both supporters and opponents of healthcare reform. Connecticut is the home base of many powerful insurance companies that oppose healthcare reform because it would threaten their mega-profits.
“Part of the credit for this victory goes to union members and others who were out in the field building public pressure,” says Dan Durso, a Local 559 Teamster who is working as a full-time coordinator of Labor for Universal Healthcare. “We’ve won an important battle but the war goes on.”
Local 559 recently was awarded a grant from the Connecticut-based Universal Healthcare Foundation. Overnight, Durso went from delivering oil for Automatic TLC to organizing public forums to lobby influential legislators.
Before the critical committee vote, Durso helped mobilize Teamsters, other union members and community supporters to tell legislators their “healthcare horror stories” and hear presentations from doctors and professors about how Connecticut could save money and provide better healthcare through a single payer system. The forums were standing room only.
Rallies are scheduled for May 5 to continue building the public pressure that will be needed to pass healthcare reform through the legislature as a whole.
“We need to get some sort of affordable insurance for everybody,” says Dave Basque, a Local 559 Teamster who attended a public forum. “I’m lucky to have good healthcare but I’ve been on both sides of the fence. And I have friends who don’t have health coverage and only go to the emergency room. That drives up the cost for everybody.
“Every American has the right to affordable healthcare insurance,” Basque said. “We’re paying for it now—universal coverage would cost less than what we’re paying now if we do it right.”
Labor Pays Rising Cost
“We’ve had a lot of big fights over healthcare here in Connecticut—including strikes at Coke and Sikorsky Aircraft. Employers are trying to push healthcare costs on to employees,” Durso said. “A single payer system would remove a contentious issue from the bargaining table.”
A single payer system, Durso explains, would cut out the middle man like HMO’s that make huge profits that drive up healthcare costs. Instead, the State of Connecticut would create a single agency that would process and pay medical bills.
“Single payer would remove the excessive profits and administrative costs from the system,” Durso says, lowering healthcare costs and making healthcare universal and affordable.
“Unions could still bargain for supplemental benefits.” Durso says.
The 2006 Teamster Convention unanimously passed a resolution in favor of universal healthcare. Now it’s our job to organize and make it happen.
Teamsters interested in more information can contact Dan Durso at Teamsters Local 559 at (860) 528-9461 ext. 14.
April 2, 2007: The 2008 UPS and Freight contracts are our chance to win the contributions we need to protect and increase our benefits.
To succeed, we need to understand the challenges we face and put together a plan that can win the pension protections and improvements we need.
That’s why Teamsters for a Democratic Union is launching a Pension Rights and Benefits Improvement Program. We will bring together members, Teamster pension activists, and benefit experts in a series of educational workshops and planning meetings to talk about:
- What’s at Stake in UPS and Freight Bargaining—and What Can Be Won
- How the Pension Protection Act Will Affect Our Benefit Funds
- What Working Teamsters Can Do To Protect and Improve Our Pensions
Teamsters in the Central States, for example, face specific challenges based on new policies adopted by the fund after the 2003 cuts and the agreement trustees made last year with the IRS. Other funds face different issues.
Hold a Workshop
Each workshop will address the particular issues affecting your pension fund—the challenges that apply as well as the opportunities to win improvements.
Now is the time to act. The next UPS and freight contracts will determine the future of our Teamster benefits for years to come.
Get informed. Know your rights. And get involved. Your participation now can make the difference.
“I attended a pension workshop as part of the Make UPS Deliver campaign. We got a lot of useful information about the ins and outs of our pension fund and what it will take to defeat the cuts here in Local 804. UPS makes big profits off of our blood and sweat. These pension cuts didn’t have to happen. We’re going to fight not just to restore the cuts—but to improve our benefits.”
Steve Auz, UPS
Local 804, New York
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