March 16, 2006: When the Central States Pension Fund trustees, led by chairman Fred Gegare, made drastic cuts two years ago, Teamsters knew their futures were not as secure as they once assumed. Those close to retirement paid the most attention, and took the lead in the Teamster fightback. These Teamsters thought they were set after nearly 30 years of hard work and couldn’t imagine top Teamster officials joining with the companies in such an attack. But now younger Teamsters are also getting informed and getting involved. Our pension and health and welfare benefits are about the future of our union. Restoring benefits will be key to organizing new members. “I’m 34 with six full-time and ten part-time years in at UPS,” said Chris Janssen from Des Moines Local 90. “There’s no guarantee positive changes are coming down the road. Others with my years of experience are getting discouraged. It’s hard to see having to work another 25 years to get to the full pension. What happened to the ‘25 and out’ that we won in 1997?” Janssen isn’t the only one with these views. Ross Thompson, a UPS package driver in Kansas City Local 41, commented, “I started driving full-time at UPS in 1990 and had already done five years part-time. My goal was to raise my family and retire by age 55. Now it looks like I’m going to be forced to work until I’m 59 if I want to collect on a full pension. “I’m not alone. Thousands of package car drivers and Teamsters in other industries are in the same boat. How are our bodies supposed to take it?” New Rule Can Drive Teamsters Out The Teamster leadership has no plan to restore the pension and medical benefits that have been taken from retirees. Those who built the union are being dumped on. But, as the brothers Janssen and Thompson indicate, this problem is about the future of our union. Central States has put into effect a new “seven percent” rule, which could drive more people out of our pension fund. This rule says that every contract negotiated must have a seven percent increase per year, each year, in pension contributions. A business rep with ongoing bargaining at three companies right now told us, “This is going to take most of our bargaining power away. At the top benefit level, we have to bargain over 40 cents an hour every year into the pension fund. Where will we find enough money to maintain health benefits?” If a contract fails to meet the seven percent test, the Teamsters under that contract will be kicked out of the pension fund. They are given no other option. This is likely to be devastating for affected Teamsters, and will reduce the size of our fund as well. The Teamster pension used to be the gold standard for retirement, and can be once again. But we need leadership that has the will to do it. It’s too easy for big-shot union officials who are drawing two or three salaries and earning multiple pensions to forget what it is like for members who are getting their bodies beat up on the job. This is why TDU members will propose an amendment to the Teamster constitution that would require pension trustees to be held accountable to the membership.

December 6, 2005: Teamster and employer trustees of the Central States Funds agreed to changes in benefits to keep the overburdened multi-employer pension fund from collapsing, a Teamsters faction reported.

The dissident group Teamsters for a Democratic Union, in a Dec. 1 Web posting, blasted the agreement as a disservice to union members and called for firing the Teamster trustees.

"In exchange for an IRS extension of the period allowing for amortizing the fund's unfunded liabilities, the trustees agreed to lock in the [2003] pension cuts and usher in more health care cuts," TDU charged. "The employers and IRS got what they wanted and Teamster members got the shaft."

The International Brotherhood of Teamsters praised the agreement and criticized TDU.

"These are more scare tactics from a small, dissident faction that is trying to exploit the pension crisis in this country for political gain," IBT said.

"The IRS amortization agreement is a major victory for Central States," the union continued. "It is the only such agreement the IRS has granted, and it will allow Central States to regain its financial footing after the unprecedented stock market losses that have affected every pension fund in the country."

TDU said "stunned" union officials were informed of the changes Nov. 8 by Fred Gegare, chairman of the five union trustees who administer the fund with five employer trustees. The Central States fund covers workers at unionized trucking companies, including UPS, the largest employer of Teamsters.

According to TDU, trustees agreed to keep in place pension cuts made in 2003, divert health and welfare money for 2007 to the pension fund and not restore a "25- 30-and-out" provision that has been eliminated for younger fund participants. In addition, future labor contracts must include an increase in pension contributions of 7 percent in each contract year.

"The IRS agreement requires employers to increase their contributions. It does not cut benefits. This dissident faction needs to get the facts straight," IBT responded.

"The dissident faction's solution to the national pension crisis is to do nothing, putting members' entire pensions in jeopardy by forcing a government takeover that would result in huge benefit cuts by as much as two-thirds," the union said.

In July, Thomas C. Nyhan, executive director of the fund, in a letter to employers, said the Internal Revenue Service at the request of the fund had approved a 10-year extension of the period for amortizing unfunded liabilities, subject to certain conditions.

"The conditions attached to the amortization extension period will require additional contributions to the pension fund in order to maintain existing benefits, but the issue of additional contributions can now be addressed in the context of the collective bargaining process rather than as a result of IRS imposed penalties," Nyhan wrote.

Nyhan could not be reached for comment on the agreement.

December 5, 2005: For nearly a year, the Hoffa administration has been lobbying for legislation that would allow Teamster benefit plans to cut members’ previously guaranteed pension benefits—and even to cut the pensions of Teamsters who have already retired.

Teamsters for a Democratic Union has fought this legislative attack on our pension security. Now at the 11th hour, James Hoffa has reversed himself and adopted TDU’s position—coming out against the so-called Red Zone Amendment.

Since early 2005, the Hoffa administration has lobbied in favor of the Red Zone Amendment—a proposal that would allow Teamster plans to cut pension benefits that members have already earned.

But in a letter to Congressional Representatives on December 2, Hoffa said, “So-called ‘red zone’ benefit cuts, would result in a reduction of vested benefits and should not be included.” This is exactly what TDU has demanded for the past year, along with many concerned Teamsters and the Pension Rights Center.

TDU members visited Congressional leaders to lobby against the Red Zone Amendment and fight to preserve federal “anti-cutback protections” that make it illegal to cut pension benefits that members have already earned.

Before Hoffa’s flip-flop on December 2, his administration had lobbied in favor of eliminating those protections. In February 2005 the IBT Legislative Director complained that “Trustees are limited by ERISA and can only affect [cut] future accruals.” In May the International again called for members to support repeal of the 1984 anti-cutback law, to give “more tools” to pension trustees to cut benefits from retirees.

“It’s nice to finally have our International Union with us, instead of against us,” said Frank Bryant a TDU member who lobbied Congress against the cuts. “My question for Hoffa would be, ‘What took you so long?’”

The pension bill is heading for the final steps. It remains to be seen if the Red Zone Amendment will be included. Hoffa’s 11th hour conversion to retirement security comes too late to affect the outcome of this legislative fight.

Fortunately, concerned Teamsters and TDU were there all along, working to protect Teamsters’ pension rights.

December 5, 2005: Employers across North America are attacking the pension and medical benefits of working Americans. Union and non-union workers are being hit with larger co-pays, cuts in benefits, or worse.

Our union needs a clear plan of action for protecting and improving benefits for all Teamsters. The employers have a plan. Our union leadership doesn’t. That’s why we are being pushed backward now.

Local Unions — and many benefit plans are local, or even company plans — are left to struggle on their own to combat cuts and maintain benefits.

We need to practice solidarity in action: a national plan of action for various industries and contracts with resources and leadership from the International Union behind it.

National Task Force
To start with, the IBT needs to start playing a leadership role in education and bargaining skills around benefit issues. A national benefit protection committee should be formed, with local officers, stewards and members. Its mission should be to help guide the research, organizing and education effort that is needed to counter the employer attack on benefits.

At the same time the IBT needs to create a task force that is staffed with benefit fund professionals and media experts. The task force would work closely with the national committee to mount campaigns.
We also need to aggressively work for a national health care plan in this country, so that non-union employers like Wal-Mart have to start paying their fair share.

The IBT under Hoffa has absolutely no ongoing mechanism for developing and implementing a united plan among Teamster benefit funds. There is an annual Teamster educational event for trustees, which is fine, but far from adequate.

When the employers or the fund managers come forward with a proposal for cutting benefits, our union trustees’ first response must never be, “OK, how much?” But too often, that is what we see happening.

Audit of all Major Teamster Funds
Hoffa claimed nearly two years ago that the IBT would do an independent actuarial study of the Central States Fund. That was a good start, but nothing was ever heard of it again.

The members are kept in the dark and treated as the enemy, instead of a positive force to fight back. The IBT also should put in place a mechanism for independent studies of pension and welfare funds, with union-selected experts, so that any potential problems are uncovered well in advance of negative consequences.

The Western Conference Fund cut the multiplier 2.5 years ago, even though the Fund was financially strong. Now it is approaching 100 percent funding and still there is no action to restore our members’ benefits.

The New England Fund cut benefits earlier this year and then backed off on part of the cuts, under pressure from members and local officers.
In both cases the International Union leadership has been silent, going along with the employer-demanded cuts. Without any independent expert studies, our members are left in the dark, isolated and angry.

Contract Campaign Organizing
A business-as-usual approach to the 2008 UPS and freight contracts won’t cut it. Massive contract campaigns will have to be put in place early, well before the 2008 bargaining.

UPS has a plan: they want out of union pension funds, and they are aggressively marketing this to our Teamster members. This must be countered with a Teamster plan to preserve and rebuild all of our pension funds. Freight and carhaul Teamsters will also need contract campaigns that take into account the challenges of winning good contracts while defending and improving benefits.

It seems clear the Hoffa administration is not going to move in this kind of pro-active way. They react to employers’ moves, mainly by going along. And they hope if they go along nicely with UPS management, then maybe management will be nice in return, and won’t move to bust apart our pension funds.

It’s going to take a new, forward-looking Teamster leadership to defend our good benefits and improve those that fall short. That’s what the Tom Leedham Strong Contracts, Good Pensions Slate is about.
Sandy Pope
Local 805 President
New York

Click here: Apples and Oranges, or Just Rotten Apples?: Study Counters Central States' Claims
Click here: Central States Fund Trustees Keep Pension and Health Care Cuts In Place
Click here: Battle Against Cut-Back Provision Will Move Into 2006

December 5, 2005: Hoffa’s PR Man dismisses the impact of the trustees’ actions: “Leebove said the changes at Central States and other pension funds should not be looked at as benefit cuts, since no accrued benefits were lost. Instead, he said, they represented reductions in future accruals that were designed to ensure the trusts are financially solvent for years to come."
–Bureau of National Affairs
November 9, 2005

The Union Trustees of the Central States Pension Fund have announced an agreement with employers and the IRS that will lock the 2003 pension cuts in place for years to come. Even worse, this deal will usher in more healthcare reductions—and lower wage increases when contracts are renegotiated.

Cuts Are Frozen in Place
At a Nov. 8 meeting of union officials, International Vice President and Trustee Chairman Fred Gegare told stunned officials that union trustees have agreed:

• to maintain a long term freeze in the cuts to the Central States pension accrual rate

• to not restore 25- and 30-and-out, which have been eliminated for younger Teamsters, and

• to divert health and welfare money for 2007 to the pension fund, which will mean more cuts in medical benefits for Teamsters and retirees.

In addition, the Fund will require that all future contracts will have to include an increase in pension contributions of 7 percent in each year of the contract. Negotiating these huge hikes in pension contributions will divert money from wage increases and medical benefits—but Teamster members will see no pension improvements in return because our trustees have agreed not to increase the pension multiplier or restore 25- and 30-and-out benefits.

Over a month has passed since the meeting and members still have not received any information. This is our fund and our benefits that are at stake. But once again, the union trustees are keeping members in the dark.

No Accountability Is the Problem
The Hoffa administration keeps dragging out the same tired excuses. The stock market declined in 2000-2001, retirees live longer now, and there are more retirees than active members.

Is any of this big news? These are well-known facts. The reason we have Trustees is to manage these challenges—not to use them to justify cuts in our benefits.

TDU commissioned a comparison with other Teamster Funds, which showed that funds with the same demographics, and the same ratio of active Teamsters to retirees have weathered the “perfect storm” much better.

Instead of excuses, we need a positive plan to build up our pension fund and restore and protect our good pension benefits that all Teamsters can be proud of.

It’s time to fire the Trustees who are better at excuses than managing our pension fund.

Those characters need to be replaced. If our trustees won’t step down, then we need to put them into retirement by electing new leadership in the 2006 International Union election.

Click here: Apples and Oranges, or Just Rotten Apples?: Study Counters Central States' Claims
Click here: IBT Needs Plan for Countering Employer Attacks on Benefits
Click here: Battle Against Cut-Back Provision Will Move Into 2006

December 5, 2005: In November, the Senate passed a version of pension reform that did not include provisions for cutting accrued benefits. That was a positive step forward in a battle that has largely been waged by two groups, the Pension Rights Center and th grassroots Central States Pension Improvement Committee (CSPIC).

In December, James Hoffa came out in opposition to the “Red Zone” cut-back amendment, at least in writing, after supporting it for most of 2005.On Dec. 15 the House of Representatives took up their own version of pension reform for a vote. The CSPIC steering committee faxed letters to Congressional Representatives, opposing the bill if it included the Red Zone amendment. The Pension Rights Center also lobbied against the House version. It is not known what, if anything, the IBT did.

The House passed the bill and it contains cutback provisions. The Senate version does not contain the Red Zone amendment. CSPIC leaders and some Teamster local officers visited Senators and staff earlier this year to help make that happen. The battle will now move into conference committee, with the Senate and House working out differences between the two bills.

This will not start until after the Congressional recess, in late January or early February.

“CSPIC will help get word out to Teamsters once we know who is on the conference committee,” Local 391 retiree Frank Bryant said. “We will need to push hard one more time to prevent this dangerous provision from being included in so-called reform legislation.”

We urge Teamsters to write your Representatives and Senators: oppose the Red Zone amendment that would allow pensions and already-earned pension credits to be cut. Those protections have been federal law since 1984. Weakening them is no way to protect the pensions of Americans.

Click here: Apples and Oranges, or Just Rotten Apples?: Study Counters Central States' Claims
Click here: IBT Needs Plan for Countering Employer Attacks on Benefits
Click here: Central States Fund Trustees Keep Pension and Health Care Cuts In Place

December 1, 2005: The Union Trustees of the Central States Pension Fund have announced an agreement with employers and the IRS that will lock the 2003 pension cuts in place for years to come. Even worse, this deal will usher in more healthcare reductions—and lower wage increases when contracts are renegotiated.

At a November 8 meeting of union officials International Vice President and Trustee Chairman Fred Gegare told stunned officials that union trustees have put their stamp of approval on new attacks on our pensions and benefits. Specifically, the trustees agreed:- to maintain a long term freeze in the cuts to the Central States pension accrual rate- to not restore 25- and 30-and-out, which have been eliminated for younger Teamsters, and
- to divert health and welfare money for 2007 to the pension fund, which will mean more cuts in medical benefits for Teamsters and retirees.

In addition, the Fund will require that all future contracts will have to include an increase in pension contributions of 7 percent in each year of the contract. Negotiating these huge hikes in pension contributions will divert money from wage increases and medical benefits—but Teamster members will see no pension improvements in return because our trustees have agreed not to increase the pension multiplier or restore 25-and 30-and-out benefits!

No members were allowed to attend the officials’ only meeting where these terms were announced. Three weeks have passed and members still have not received any information. This is our fund and our benefits at stake. But once again, the union trustees are keeping members in the dark.

Roots of the Crisis

The latest crisis at Central States is rooted in the Hoffa administration’s failure to bargain enough employer contributions into the fund in the last UPS, freight and carhaul negotiations. Fund documents that we obtained by going to court prove that Hoffa knew that cuts were on the horizon.

But instead of leveling with the members and fighting for higher contributions, Hoffa hid the facts and promised, in writing, that all our pension and medical benefits would be protected for the life of those contracts.

Without the needed contributions, the fund’s credit balance continued to deteriorate. In 2003, the credit balance was approaching the point where the IRS would require employers to increase their contributions to the plan. That’s when the employers sought sharp cuts in pension accruals and the virtual elimination of retiree health coverage.

Both our union and the employers had an interest in taking steps to improve the Fund’s credit balance. But the employers had a special interest, because they faced the threat of IRS-imposed penalties and increased contributions. That threat gave our union trustees bargaining power.

Our union trustees could have used that leverage to insist on a union-sponsored study and bargain for the best possible outcome for Teamster members. Instead our union trustees just went along with the employers’ demands for cuts without any fight—effectively surrendering control of our fund to the employers.

Now the Hoffa administration has gone a step further and turned decision-making power over our benefits to the IRS. In exchange for an IRS extension of the period allowing for amortizing the Fund’s unfunded liabilities, the Trustees agreed to lock in the pension cuts and usher in more healthcare cuts.

The employers and IRS got what they wanted and Teamster members got the shaft. Our Union Trustees are supposed to represent our interests. Under the Hoffa administration, they have failed miserably. It’s time for them to go—and to be replaced with trustees who will fight for Teamster members.

No Accountability Is the Problem

The Hoffa administration keeps dragging out the same, tired excuses, over and over. The stock market declined in 2000-2001, retirees live longer now, and there are more retirees than active members. Is any of this big news? These are well-known facts. The reason we have Trustees is to manage these challenges—not to use them to justify cuts in our benefits.

TDU commissioned a comparison with other Teamster Funds, which showed that funds with the same demographic have weathered the “perfect storm” much better. It’s time to fire the Trustees who are destroying our Central States benefits.

Amid the lies and cover-ups, you never hear one word about a positive plan to build up our Fund. Do they plan to bring some 50,000 UPS Part-Timers into the Central States Fund in the next contract? They are in the Teamster Funds in the West, in New England and in Upstate New York. Why not Central States?

Is there a plan to organize UPS-Overnite and bring many thousands more into the Fund? The Hoffa administration doesn’t have a plan to build up our fund—just plans to cut our benefits. That’s exactly what UPS and other employers want—cuts that will undermine our good union benefits and drive a wedge between members and our union.

Teamster members and leaders fought for years to win good pension and medical benefits. Sometimes we took light wage increases to make it happen. We fought to win early retirement benefits so we could get out of these hard jobs with our health intact. We fought together to win them, now Fred Gegare and the Hoffa Administration destroy them and tell us we should be glad we don’t work at Enron.

Those characters need to be replaced. If our trustees won’t step down, then we need to put them into retirement by electing new leadership in the 2006 International Union election.

November 1, 2005:When employer and union trustees colluded to cut their pensions, Teamster members in New York Local 805 fought back. First, they elected new local officers who sued the employer trustees. Now, they’ve scored a major victory for pension justice.

Local 805 President Sandy Pope has finalized a settlement that reduces the pension cuts, raises members' pension accrual retroactively, and institutes sweeping reforms in how the pension plan is run.

In December, the Employer Trustees on the Local 805 Pension Fund slashed future pension benefit accruals to zero with the help of the former Local 805 President Gerry Whelan who voted in favor of the cut. The employer trustees then turned around and hired Whelan and his wife to run the Funds.

The Local 805 pension fight shows the right union leadership can make a difference in protecting our pensions. Local 805 is a small local with early retirement benefits of $2,500/month—not UPS or freight money, but a solid pension for a fund of it size. The employers slashed the pension to zero to avoid having to increase their contributions.

But a strong stand by the new reform leaders of Local 805 took on this pension scheme. In exchange for dropping the lawsuit in Federal Court, Local 805 won a settlement that turned back the pension attack:

• Cut to zero eliminated: The accrual rate of zero adopted in December will never go into effect. The Union Trustees and the Employer Trustees will each hire an actuary to determine the highest future benefit accrual rate the Pension Fund can afford. The new rate will be applied retroactive to the beginning of the "zero period."

• New, professional fund manager: The former union president who went along with the scheme and his wife are both gone from the fund. A professional fund manager has been hired.

• Trustee reforms: The Board of Trustees of the fund will be restructured. The Union and the Employers will each add two new members. This reform will break up the clique of employers who dominated the fund. Of the two new Union Trustees, one will be a Local 805 retiree. The Union Trustees already includes two rank-and-file members.

Under the agreement, the employer trustees are required to accept the highest, prudent recommendation from the actuaries. While the accrual rate may not be fully restored (the Fund suffered market losses experienced by all Pension Funds), participants will be getting the highest benefit the plan can afford. The new Local 805 leadership and union trustees made a strong stand against the employers attack on members’ pension, and leveraged the best possible result for the members—all while keeping members informed every step of the way.

That’s a far cry from what happened in funds like the Central States and an example of the difference the right leadership can make when our pensions are under attack.

October 18, 2005: Pension reform legislation was approved by the Senate Health, Education, Labor and Pensions (HELP) Committee in early September and appeared to be on a fast track. But then business interests intervened and the bill was postponed, apparently until the end of the year.

The HELP bill would provide a range of financial relief to defined benefit pension funds, like the funds that cover many Teamsters.

A negative provision called the Red Zone amendment was not included in the HELP version—thanks to some hard work by Teamster local officers and rank and filers who traveled to Washington to meet with Senate staff about the provision. Had it not been defeated, it would have allowed troubled plans to cut back pension benefits that have already been accrued.

Different corporate and union interests have voiced opposition to the pension bill based on particulars of their industries. Continental and American Airlines opposed parts that would benefit their bankrupt competitors. General Motors and the United Auto Workers attacked a provision that would tie pension contribution requirements to a corporation’s credit rating, noting that the auto industry has cyclical ups and downs.

A coalition that includes UPS management, the IBT and some Teamster pension plans offered amendments to provide more breathing room for under-funded multi-employer plans that were hurt by the stock market in 2000-2001.

Meanwhile, the International Union has been on its own roller coaster regarding the legislation. Last spring, when the house passed a similar bill, HR 2830, the IBT was pressing locals to circulate petitions in support of the legislation. Later they said they would take a wait and see attitude, and in late September the IBT issued a bulletin stating they now oppose both the House and Senate versions as drafted.

September 15, 2005: Fighting pension cuts can make a difference. That’s the lesson coming out of New England where angry Teamster members pressured the New England Pension Fund Trustees to backtrack on pension cuts they announced in July.

“I was featured in Convoy after I learned that the pension cuts were going to make it impossible for me to retire in November like I planned,” said Local 42 member Dan Faust, who is just a few months short of 30 years of pension credit “The next thing I know I got a call from my local officer and she told me the trustees had made changes because of all the fallout and I would be able to retire.

“I’m not saying it was all about that one article. The trustees heard from a lot of Teamsters who were furious and we won some positive changes as a result. I’m riding on cloud nine right now,” Faust said.

The news is not all good. For most Teamsters, the restrictions on 25-and-out and 30-and-out pensions before age 57 remain in place. New England Teamsters who did not have 25 years of credit by July 31, 2005 will not be eligible for their full special-service pension until age 57. Even if you had 25 years of credit by July 31, you will not be eligible for a Plan D special-service pension (30-and-out at $3,500/month) until you are at least 57.

“A lot of good Teamsters are still being hurt by these cuts and they are furious—and rightfully so,” said Faust. “Members understand that action has to be taken to protect our pension funds over the long term. But it shouldn’t be on the backs of hard-working Teamsters who have sweated all their lives to put money into these plans.”

Improvements Won
Under the original changes, Teamsters with 25 years who continued working after July 31 would have their pension frozen until they reach age 57. Then, at 57, the pension would snap back to the full rate. A member who had to retire before 57 because of injury or the closure of their company would get no additional benefit for their extra time worked.

The trustees have now eliminated this “snap back” provision. If, and only if, you had 25 years on July 31 and were eligible for a special-service benefit, then you will continue to earn the additional $150 per year or get to the 30 year/$3,000 benefit and be able to retire at any age. However, UPS, freight and other Teamsters working under a Plan D contract cannot receive their maximum benefit unless they wait until 57 to retire.

In a second victory, the trustees reversed a rule change that would have cut the pension accrual rate of all members covered by already-negotiated contracts that did not include annual increases in their pension contributions after July 31, 2005. This would have meant pension cuts for many New England Teamsters covered under multi-year contracts that were negotiated before the pension rules were changed.

Now, the Pension Fund will honor all existing contracts by maintaining the negotiated and promised accrual rate. When these contracts expire, the new contracts must include increased pension contributions of five percent a year to maintain the accrual rate.

More Changes Ahead?
The quick reversal on the part of the trustees raises disturbing questions. If the fund could afford the new revisions restoring some cut benefits, then why were the cuts made in the first place? Exactly what information were the trustees looking at or not looking at prior to making the cuts in July?

As Convoy goes to press, the fund still has not put out anything in writing about the rule changes, fueling speculation that more changes may be coming. Many members say these rule changes don’t go far enough. It remains to be seen whether membership pressure can convince the trustees to introduce stronger grandfathering provisions.

Accountability Needed
Teamster members and officers have won some improvements already by putting pressure on the pension fund trustees.

This success is an example of how our union trustees on the pension fund are indirectly accountable if we apply enough heat. What is really needed is direct accountability.

The New England pension cuts show the need for us to elect delegates to the 2006 Teamster Convention who will support changes to the Teamster Constitution to hold benefit fund trustees directly accountable to Teamster members—and to support candidates for International office who will defend our pensions from attacks by the employers and corporate politicians.