Pension Movement Fights on New Fronts
September 15, 2005: The fight for pension justice has focused on the U.S. Congress in recent weeks, as Teamsters have organized to support legislation that helps Teamster funds, and to oppose a dangerous amendment that endangers our benefits.
Teamster members are starting to get results. On Sept. 8, the Senate Health, Education, Labor and Pensions (HELP) Committee passed a pension bill which did not include the anti-worker “Red Zone Amendment” that would allow certain plans to make drastic cuts in promised early retirement benefits earned by long-time Teamsters.
Thanks to the heroic efforts of concerned members, key Senators understood the devastating effect this could have on workers who have earned 25- and 30-and-out benefits.
Teamsters have called, written and visited Representatives and Senators to make their views heard. We need to keep it up—the full Senate will likely vote on the pension bill in late September, and amendments will likely be made from the floor. Now is the time to be involved, to say Yes to pension reform, and No to an amendment that would repeal the anti-cutback language in federal pension law.
For more information on the bill and how you can help, go to the Pension Rights Center website at: http://pensionrights.org/pages/policy_multiemployer.html.
Pension Bills
The “Defined Benefit Security Act” was passed by the Senate HELP Committee on a vote of 18-2. Senator Tom Harkin (D-Iowa) opposed it, because of its provisions on cash balance plans. Essentially this part of the bill would allow companies to break early retirement promises in single-employer plans. This bad language would not directly affect workers covered by Teamster multiemployer plans.
The bill has positive provisions. It would allow multiemployer plans more breathing room to recover following stock downturns. It would also impose stricter standards on plans, so that they would have to make reasonable actuarial assumptions and interest projections, and speed up the funding of benefit improvements. At least theoretically, it would hold trustees and managers to a higher standard of fund management, and prevent our plans from being taken over by the federal pension insurance program, which provides only very low guarantees. The Senate bill would require disclosure to participants of full actuarial reports and other financial documents. TDU members have lobbied in favor of this transparency provision.
The House version of the bill is similar, but includes the dangerous amendment that would allow cutbacks in accrued benefits.
Hoffa and Pension Reform
The International Union supports the pension bill, but also says “If… this bill turns out to be harmful to multi-employer funds, the Teamsters Union is committed to doing everything possible to defeat it.” (August Teamster Leader.)
The Hoffa administration has launched a major campaign with petitions, PR, and bulletins but never names a single item in the pension bill that they support or oppose. This secrecy makes it impossible for members to write or talk to their legislators, unless they just want to say “whatever Hoffa says, that’s right.” It’s hard to motivate Teamsters and retirees with that leadership.
What’s most dangerous is the Red Zone Amendment. A critically important protection won in 1984, the anti-cutback provision, should not be given up without a fight. Insiders in Washington report that UPS management is pushing this dangerous amendment, and we can see why. But we can’t see why our union would go along!
Pension Movement on the Move
The fight for pension justice for Teamsters and retirees continues to spread. Teamsters in the Central States, Western, Central Pennsylvania, New England and other plans are organizing and fighting back.
This month the focus is on Congress, but the longer term emphasis has to be on winning accountability and honesty out of our union pension trustees.
That is the battle that can and will be won.
Teamster members are starting to get results. On Sept. 8, the Senate Health, Education, Labor and Pensions (HELP) Committee passed a pension bill which did not include the anti-worker “Red Zone Amendment” that would allow certain plans to make drastic cuts in promised early retirement benefits earned by long-time Teamsters.
Thanks to the heroic efforts of concerned members, key Senators understood the devastating effect this could have on workers who have earned 25- and 30-and-out benefits.
Teamsters have called, written and visited Representatives and Senators to make their views heard. We need to keep it up—the full Senate will likely vote on the pension bill in late September, and amendments will likely be made from the floor. Now is the time to be involved, to say Yes to pension reform, and No to an amendment that would repeal the anti-cutback language in federal pension law.
For more information on the bill and how you can help, go to the Pension Rights Center website at: http://pensionrights.org/pages/policy_multiemployer.html.
Pension Bills
The “Defined Benefit Security Act” was passed by the Senate HELP Committee on a vote of 18-2. Senator Tom Harkin (D-Iowa) opposed it, because of its provisions on cash balance plans. Essentially this part of the bill would allow companies to break early retirement promises in single-employer plans. This bad language would not directly affect workers covered by Teamster multiemployer plans.
The bill has positive provisions. It would allow multiemployer plans more breathing room to recover following stock downturns. It would also impose stricter standards on plans, so that they would have to make reasonable actuarial assumptions and interest projections, and speed up the funding of benefit improvements. At least theoretically, it would hold trustees and managers to a higher standard of fund management, and prevent our plans from being taken over by the federal pension insurance program, which provides only very low guarantees. The Senate bill would require disclosure to participants of full actuarial reports and other financial documents. TDU members have lobbied in favor of this transparency provision.
The House version of the bill is similar, but includes the dangerous amendment that would allow cutbacks in accrued benefits.
Hoffa and Pension Reform
The International Union supports the pension bill, but also says “If… this bill turns out to be harmful to multi-employer funds, the Teamsters Union is committed to doing everything possible to defeat it.” (August Teamster Leader.)
The Hoffa administration has launched a major campaign with petitions, PR, and bulletins but never names a single item in the pension bill that they support or oppose. This secrecy makes it impossible for members to write or talk to their legislators, unless they just want to say “whatever Hoffa says, that’s right.” It’s hard to motivate Teamsters and retirees with that leadership.
What’s most dangerous is the Red Zone Amendment. A critically important protection won in 1984, the anti-cutback provision, should not be given up without a fight. Insiders in Washington report that UPS management is pushing this dangerous amendment, and we can see why. But we can’t see why our union would go along!
Pension Movement on the Move
The fight for pension justice for Teamsters and retirees continues to spread. Teamsters in the Central States, Western, Central Pennsylvania, New England and other plans are organizing and fighting back.
This month the focus is on Congress, but the longer term emphasis has to be on winning accountability and honesty out of our union pension trustees.
That is the battle that can and will be won.
Pension Reform Debate Leaves Out Families, Future of Pension System
August 28, 2005: The current debate in Congress over pension “reform” tends to leave out the most important issues: protection of pension benefits for families, and protection of our pension system into the future. Instead the debate is focused too narrowly on cutting benefits and allowing corporations to eliminate defined benefit plans—plans that have been crucial to eliminating old-age poverty in the U.S.
Two experts who testified earlier this year in Congress addressed these broader concerns. Teresa Ghilarducci is a professor of economics at the University of Notre Dame. Norman Stein is a professor of law at the University of Alabama who teaches and writes on labor and employee benefits.
Below are excerpts from their testimony before the House Committee on Education and the Workforce. These comments were addressed to the Bush Administration’s proposed legislation on single-employer plans (not Teamster plans), but show the kind of approach that is needed to deal with the pension issue.
The multi-employer (including Teamster plans) legislation now before Congress has the same pro-employer slant that these experts noted in the earlier bill.
Click on the links below for the for full testimony:
Teresa Ghilarducci (Associate Professor of Economics
University of Notre Dame)
Statement of Norman P. Stein On Behalf of the Pension Rights Center
On the roots of the “crisis”:
Norman Stein: “The worst of the problems of defined benefit plans are concentrated in a few industries that have undergone major structural change, partly in response to actions taken by the federal government. … If the airline industry had not been deregulated, United, Delta and U.S. Airways would have been better situated to fund their pension plans adequately.”
Norman Stein: “As a society, we need to accept some responsibility for the current financial problems in the defined benefit system. We should not lose sight of a simple fact: the current fiscal stresses on defined benefit plans and the PBGC are not the product of illegal fraud committed by mendacious corporate managers nor the selfish actions of the millions of Americans who have relied on defined benefit plans. Rather, the problems are, at least in retrospect, the results of the laws that Congress enacted and of actions taken by the Executive branch.”
On the proposed reform legislation:
Teresa Ghilarducci: “The whole idea of ERISA and pension protection was to ensure that promises made and indirectly paid for by workers weren’t reneged on. But this bill steps away from protecting accrued benefits. The bill unfairly places the losses of funding failures on workers.”
Norman Stein: “The administration proposal would require that certain underfunded plans freeze future benefit accruals and would bar benefit improvements. Such restrictions are wrong, so long as new benefits are funded and old benefit liabilities are being amortized under appropriately rigorous schedules.”
On access to information:
Teresa Ghilarducci: “Why not add a worker representative on the board of trustees? … [T]hrough their representatives they would have a genuine link and awareness of ongoing pension funding issues. A worker representative would further transparency goals.”
On what needs to be done:
Teresa Ghilarducci: “Implement funding rules that freeze benefit accruals for funds with below 60 percent funding, but don’t make 80 percent a blanket trigger. … [R]eform should help employers find ways to stay in the system and get through short-term difficulties.”
Norman Stein: “Existing employee benefit expectations should be respected. … [R]estrictions on employees’ access to certain types of benefits, or the immediate negation of certain benefit guarantees, or a mandatory freeze on new benefit accruals, should be avoided wherever possible.”
Two experts who testified earlier this year in Congress addressed these broader concerns. Teresa Ghilarducci is a professor of economics at the University of Notre Dame. Norman Stein is a professor of law at the University of Alabama who teaches and writes on labor and employee benefits.
Below are excerpts from their testimony before the House Committee on Education and the Workforce. These comments were addressed to the Bush Administration’s proposed legislation on single-employer plans (not Teamster plans), but show the kind of approach that is needed to deal with the pension issue.
The multi-employer (including Teamster plans) legislation now before Congress has the same pro-employer slant that these experts noted in the earlier bill.
Click on the links below for the for full testimony:
Teresa Ghilarducci (Associate Professor of Economics
University of Notre Dame)
Statement of Norman P. Stein On Behalf of the Pension Rights Center
On the roots of the “crisis”:
Norman Stein: “The worst of the problems of defined benefit plans are concentrated in a few industries that have undergone major structural change, partly in response to actions taken by the federal government. … If the airline industry had not been deregulated, United, Delta and U.S. Airways would have been better situated to fund their pension plans adequately.”
Norman Stein: “As a society, we need to accept some responsibility for the current financial problems in the defined benefit system. We should not lose sight of a simple fact: the current fiscal stresses on defined benefit plans and the PBGC are not the product of illegal fraud committed by mendacious corporate managers nor the selfish actions of the millions of Americans who have relied on defined benefit plans. Rather, the problems are, at least in retrospect, the results of the laws that Congress enacted and of actions taken by the Executive branch.”
On the proposed reform legislation:
Teresa Ghilarducci: “The whole idea of ERISA and pension protection was to ensure that promises made and indirectly paid for by workers weren’t reneged on. But this bill steps away from protecting accrued benefits. The bill unfairly places the losses of funding failures on workers.”
Norman Stein: “The administration proposal would require that certain underfunded plans freeze future benefit accruals and would bar benefit improvements. Such restrictions are wrong, so long as new benefits are funded and old benefit liabilities are being amortized under appropriately rigorous schedules.”
On access to information:
Teresa Ghilarducci: “Why not add a worker representative on the board of trustees? … [T]hrough their representatives they would have a genuine link and awareness of ongoing pension funding issues. A worker representative would further transparency goals.”
On what needs to be done:
Teresa Ghilarducci: “Implement funding rules that freeze benefit accruals for funds with below 60 percent funding, but don’t make 80 percent a blanket trigger. … [R]eform should help employers find ways to stay in the system and get through short-term difficulties.”
Norman Stein: “Existing employee benefit expectations should be respected. … [R]estrictions on employees’ access to certain types of benefits, or the immediate negation of certain benefit guarantees, or a mandatory freeze on new benefit accruals, should be avoided wherever possible.”
Uproar Wins Changes to Pension Cuts in New England
August 28, 2005: The recently announced pension cuts in New England went over like a Yankees victory in Fenway Park. The angry uproar by members and local officers has pressured the New England Pension Fund Trustees to reverse two of their most unfair pension cuts announced in July.
The new is not all good. The restrictions on 25-and-out and 30-and-out pensions before age 57 remain in place. New England Teamsters who did not have enough years of credit by July 31, 2005 will not be eligible for 25- or 30-and-out until age 57.
Unlike in the past, the changes did not include grandfathering provisions to protect Teamsters who were close to making their 25 or 30 years and were planning to retire soon. Members are calling for the fund trustees to grandfather existing negotiated promises. Teamsters who were close to qualifying under the old rules should have their contracts honored.
Change #1: No Punishment for Continuing to Work
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 and be eligible to retire at any age.
Change #2: Honoring Promises in Existing Contracts
Under the original cuts, Teamsters would have suffered a reduction in their pension accrual if they were covered by contracts that did not include annual increases in their pension contributions of 5 percent. 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.
The Pension Fund Trustees have backed off of this unreasonable rule. Now, the Pension Fund will honor all existing contracts by maintaining the accrual rate. When these contracts expire, the new contracts must include increased pension contributions of 5 percent a year to maintain the accrual rate.
Pension Reform, Accountability Needed
Both of the reforms to the original cuts address problems that were first reported by TDU. It remains to be seen whether membership pressure can convince the Trustees to introduce stronger grandfathering provisions that will protect Teamsters who were planning to retire under the old rules.
Teamster members and officers won these improvements by putting pressure on the Pension Fund Trustees. This 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 back reforms 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.
The new is not all good. The restrictions on 25-and-out and 30-and-out pensions before age 57 remain in place. New England Teamsters who did not have enough years of credit by July 31, 2005 will not be eligible for 25- or 30-and-out until age 57.
Unlike in the past, the changes did not include grandfathering provisions to protect Teamsters who were close to making their 25 or 30 years and were planning to retire soon. Members are calling for the fund trustees to grandfather existing negotiated promises. Teamsters who were close to qualifying under the old rules should have their contracts honored.
Change #1: No Punishment for Continuing to Work
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 and be eligible to retire at any age.
Change #2: Honoring Promises in Existing Contracts
Under the original cuts, Teamsters would have suffered a reduction in their pension accrual if they were covered by contracts that did not include annual increases in their pension contributions of 5 percent. 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.
The Pension Fund Trustees have backed off of this unreasonable rule. Now, the Pension Fund will honor all existing contracts by maintaining the accrual rate. When these contracts expire, the new contracts must include increased pension contributions of 5 percent a year to maintain the accrual rate.
Pension Reform, Accountability Needed
Both of the reforms to the original cuts address problems that were first reported by TDU. It remains to be seen whether membership pressure can convince the Trustees to introduce stronger grandfathering provisions that will protect Teamsters who were planning to retire under the old rules.
Teamster members and officers won these improvements by putting pressure on the Pension Fund Trustees. This 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 back reforms 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.
CSPIC Members Lobby Congress About Pension Bill
August 28, 2005: TDU member Frank Bryant wrote to tell us, “As you advised in your article ‘Taking Action to Protect Your Pension’ in the July/August issue of Convoy Dispatch, a group of my Rank and File brothers and sisters decided to do just that: to take action to protect our pensions.”
On Aug. 25 a delegation of Teamster members traveled to Washington, D.C. to meet with congressional aides about pending pension legislation. The delegation included Tommy Burke, Kevin Wright, Frank Bryant (all from Local 391, North Carolina), Randy Brown, President of Local 728, Atlanta and Sandy Pope, President of New York Local 805. They met with aides from Senators Kennedy, Clinton, Enzi and Burr—all of whom are on the Senate committee which introduced the legislation in the Senate.
On Aug. 25 a delegation of Teamster members traveled to Washington, D.C. to meet with congressional aides about pending pension legislation. The delegation included Tommy Burke, Kevin Wright, Frank Bryant (all from Local 391, North Carolina), Randy Brown, President of Local 728, Atlanta and Sandy Pope, President of New York Local 805. They met with aides from Senators Kennedy, Clinton, Enzi and Burr—all of whom are on the Senate committee which introduced the legislation in the Senate.
Pension Cuts Hit New England
July 27, 2005: The Union Trustees on the New England Teamsters Pension Fund have agreed to new pension restrictions—including eliminating 25-and-out and 30-and-out pensions before age 57.
The cuts are coming just as news of the fund’s strong financial performance is hitting members’ homes. The Fund just mailed its summary annual report to members this week, in which it reported that Fund assets grew by more than $121.5 million in the last fiscal year.
Members who do not have 25 years of credit by July 31, 2005, will not be eligible for 25- or 30-and-out until age 57. Members who do have 25 years of credited service, but are under age 57, are protected and can get their earned pension. But if they continue to work they will have their pension frozen until that age. So a Teamster who is 53 and 27 years credit, with a pension accrued of $2,300 per month, could work the next four years with zero pension improvement. Then, at 57, the pension will snap back to the full rate.
Pension accrual rates are also frozen. New contracts will have to increase pension contributions by 5% per year to maintain the present rate of accrual.
But the biggest cuts are in early retirement: the Trustees’ July 13 announcement states that the goal is to keep Teamsters working longer.
While most Teamsters don’t retire before 57 and will be hurt very little, many do retire early. Many are forced to because of company closures (including the Red Star victims) or health factors. These Teamsters are going to take the brunt of the cuts imposed.
Worst hit of all are those who fall short of 25 years. A Teamster with 24 years credit, at age 49, will not become eligible for any Special Service (25- or 30-year) pension for eight years, until age 57.
An announcement is expected to reach New England Teamsters any day with the details of the cuts.
New England Teamsters Hit with Pension Cuts
July 27, 2005: Teamsters in New England reacted angrily when the New England Pension Fund announced new benefit restrictions—including eliminating 25-and-out and 30-and-out pensions before age 57.
The changes were announced on July 15, just two weeks after the fund announced that its assets grew for the second straight year. In all, the fund’s assets have grown by more than $429 million in the last two years.
The pension cuts come despite James Hoffa’s promises after he negotiated the “Best Contract Ever” at UPS—as well as after freight and carhaul negotiations—that members’ pension benefits would be secure for the life of these agreements.
New England pension accrual rates are frozen. New contracts will have to increase pension contributions by 5 percent per year to maintain the present rate of accrual.
The biggest cuts are in early retirement. If you do not have enough years of credit by July 31, 2005, you will not be eligible for 25- or 30-and-out until age 57. Members who do have 25 or 30 years of credited service, but are under age 57, are protected from the cuts by federal law and can get their earned pension.
UPS and other employers wanted the fund to make even more drastic cuts to members’ benefits, but union trustees refused.
No Grandfathering Protections
Unlike in the past, the changes did not include grandfathering provisions to protect Teamsters who are close to making their 25 or 30 years and were planning to retire soon. Members were given just two weeks notice of the changes.
TDU has received numerous reports of members’ retirement plans being thrown into chaos by the changes.
“I had planned to retire in November 2005 once I made my 30 ‘good years’ after 36 years as a Teamster,” said Dan Faust, a ready-mix driver from Local 42 in Lynn, Mass.
“Now my retirement has been put off for two more years until I turn 57. What really shocked me is they did not grandfather us in as they’ve done in the past. It’s wrong and cold.”
There’s an additional catch that punishes Teamsters with 25 years who continue working. Beginning July 31, these Teamsters will have their pension frozen until they reach age 57. So a Teamster who is 53 with 27 years credit, with an accrued pension of $2,300 per month, could work the next four years with zero pension improvement. Then, at 57, the pension would snap back to the full rate. But a member who has to retire before 57 because of injury or the closure of their company would work extra time for no additional benefit.
Making Members Work Longer
The fund notice said openly that the goal was to get members to work longer.
“I’ve had some of the union trustees on the fund tell me you really shouldn’t be looking to retire that early,” said Jack Reardon, a UPS feeder driver and vice president of Local 170 in Worcester, Mass. “That’s what I expect to hear from the company. You try driving for 25 or 30 years and then be told you need to spend several more years behind the wheel. It’s not right.
“We used to say, ‘When I hit 30 years, you can retire me but you can’t fire me.’ Well that’s out the door,” Reardon said. “I’ll have to work 36 years to be 57. Members are asking, ‘What did we do to deserve this?’ ”
While most Teamsters don’t retire before age 57 and will be hurt very little, many do retire early. Others are forced to because of company closures (including the Red Star victims) or health factors. These Teamsters are going to take the brunt of the imposed cuts.
Other Teamsters hit by the cuts are members who sacrificed wage increases in recent contract negotiations in order to get pension contributions high enough to maintain eligibility for special service pensions—for which they won’t qualify under the new rules.
That’s just what happened to approximately 900 bakery drivers covered by a recently negotiated regional agreement with Interstate Bakeries Corporation. These members took a two-year freeze in their commission rate in order to stay eligible for 25- and 30-and-out pensions.
That contract promise has been broken. But these Teamster drivers are not getting back their commission increases.
The changes were announced on July 15, just two weeks after the fund announced that its assets grew for the second straight year. In all, the fund’s assets have grown by more than $429 million in the last two years.
The pension cuts come despite James Hoffa’s promises after he negotiated the “Best Contract Ever” at UPS—as well as after freight and carhaul negotiations—that members’ pension benefits would be secure for the life of these agreements.
New England pension accrual rates are frozen. New contracts will have to increase pension contributions by 5 percent per year to maintain the present rate of accrual.
The biggest cuts are in early retirement. If you do not have enough years of credit by July 31, 2005, you will not be eligible for 25- or 30-and-out until age 57. Members who do have 25 or 30 years of credited service, but are under age 57, are protected from the cuts by federal law and can get their earned pension.
UPS and other employers wanted the fund to make even more drastic cuts to members’ benefits, but union trustees refused.
No Grandfathering Protections
Unlike in the past, the changes did not include grandfathering provisions to protect Teamsters who are close to making their 25 or 30 years and were planning to retire soon. Members were given just two weeks notice of the changes.
TDU has received numerous reports of members’ retirement plans being thrown into chaos by the changes.
“I had planned to retire in November 2005 once I made my 30 ‘good years’ after 36 years as a Teamster,” said Dan Faust, a ready-mix driver from Local 42 in Lynn, Mass.
“Now my retirement has been put off for two more years until I turn 57. What really shocked me is they did not grandfather us in as they’ve done in the past. It’s wrong and cold.”
There’s an additional catch that punishes Teamsters with 25 years who continue working. Beginning July 31, these Teamsters will have their pension frozen until they reach age 57. So a Teamster who is 53 with 27 years credit, with an accrued pension of $2,300 per month, could work the next four years with zero pension improvement. Then, at 57, the pension would snap back to the full rate. But a member who has to retire before 57 because of injury or the closure of their company would work extra time for no additional benefit.
Making Members Work Longer
The fund notice said openly that the goal was to get members to work longer.
“I’ve had some of the union trustees on the fund tell me you really shouldn’t be looking to retire that early,” said Jack Reardon, a UPS feeder driver and vice president of Local 170 in Worcester, Mass. “That’s what I expect to hear from the company. You try driving for 25 or 30 years and then be told you need to spend several more years behind the wheel. It’s not right.
“We used to say, ‘When I hit 30 years, you can retire me but you can’t fire me.’ Well that’s out the door,” Reardon said. “I’ll have to work 36 years to be 57. Members are asking, ‘What did we do to deserve this?’ ”
While most Teamsters don’t retire before age 57 and will be hurt very little, many do retire early. Others are forced to because of company closures (including the Red Star victims) or health factors. These Teamsters are going to take the brunt of the imposed cuts.
Other Teamsters hit by the cuts are members who sacrificed wage increases in recent contract negotiations in order to get pension contributions high enough to maintain eligibility for special service pensions—for which they won’t qualify under the new rules.
That’s just what happened to approximately 900 bakery drivers covered by a recently negotiated regional agreement with Interstate Bakeries Corporation. These members took a two-year freeze in their commission rate in order to stay eligible for 25- and 30-and-out pensions.
That contract promise has been broken. But these Teamster drivers are not getting back their commission increases.
Hoffa Pushes Pension Bill That Could Cut Your Benefits
July 27, 2005: On June 29, a congressional committee passed a pension bill that would endanger Teamster pensions by making it easier for multi-employer plans to cut retirement benefits.
The misnamed “Pension Protection Act” contains a dangerous provision that would allow troubled pension plans to cut benefits that members have already accrued—and even cut the benefits of Teamsters who have already retired for less than one year. Under current laws, these cuts are illegal. Only future pension accruals can be cut.
Not surprisingly, UPS management lobbied heavily for the bill’s passage (HR 2830). But the bill was also supported by the trustees on the Teamsters Central States Pension Plan. And James Hoffa himself hailed the bill as a “great first step.”
All 29 Republicans on the House Committee on Education and the Workforce supported the bill, introduced by Rep. John Boehner (R-Ohio), and all 22 Democrats refused to vote on the measure. The bill will be considered in other committees and by the Senate
Teamsters, take warning: this bill is dangerous. UPS management supports this bill because they want the Teamster Central States Pension Fund, and possibly other Teamsters funds, to be able to cut already-earned benefits.
If passed into law, the bill would reduce pension security for Teamster members—and all working families. That’s why the Pension Rights Center, the organization in Washington that protects and promotes the pension rights of American workers and retirees, opposes changes that allow cuts in earned pension credits.
Your Pension in Danger
The proposed bill would make it easier for a troubled multi-employer pension plan to go into “reorganization” status. Once a plan is in “reorganization” the trustees would be free to drastically cut benefits, even benefits already accrued.
If this happens, a Teamster with 30 credit years in Central States could possibly be told, “Sorry, your 30-and-out credits won’t work. You have work until you are 62 to get it.” Disability pensions could be cut, 25-and-out and 30-and-out benefits could be cut for working Teamsters and for those who are retired less than one year.
Only retirement benefits at “normal retirement age” would be legally protected. This is age 62 or 65 for most pension funds.
Employers, Hoffa Want More Power to Cut Your Pension
Under present law, these cuts are illegal.
UPS management wants that changed. So does the Hoffa administration. In a letter to all local leaders in February, IBT leaders complained that “Trustees are limited by ERISA and can only affect [cut] future accruals.” ERISA is the federal pension law that makes it illegal for pension plans to cut benefits that employees have already accrued.
Hoffa, sold his “Best Contract Ever” at UPS as well as the freight and carhaul agreements on the promise that our benefits would be protected. Now he is using your dues money to lobby Congress so Teamster plans can cut benefits that members have already earned! Hoffa’s own lucrative pension plan is unaffected by this proposal.
Why would the Hoffa administration do this? Because Hoffa and other top Teamster officials are intimidated by UPS management. UPS has told them either the company get pension cuts or they will try to pull out of the Teamster pension plans in the next contract.
Time to Fight Back, Not Give Up
Instead of caving in to the company’s threats three years before the next negotiations, our union leadership should be leading members in a fightback to protect our benefits. We should be lobbying Congress for pension reform that protects Teamster retirement security—not undermines it.
The IBT should be educating members about the threat that a UPS pullout would pose both to all Teamsters’ retirement security. Instead, the IBT has let UPS’s rumors and attacks on our pensions go unanswered.
Finally, the IBT should be mobilizing members to fight for adequate funding of our pension plans in the coming contracts. It may require some sacrifice such as reduced wage gains, but we can negotiate these increases.
In fact, on August 1 another sixty cents per hour will go into the Central States Pension Plan for UPS, freight, carhaul and certain other Teamsters. That increase alone will put nearly $100 million a year in new money into Central States. More of that can be done in the next contract.
What You Can Do
This is time for Teamsters to speak out. Write your Congressional reps and Senators. Urge them to oppose any pension bill that allows for cutbacks in earned benefits. Ask your union officers to do the same.
We also urge Teamster members to contact James Hoffa and tell him to use our dues money to fight to protect our benefits—not to lobby for legislation that will make it legal to cut pension benefits we have already earned.
Click here for a downloadable TDU Pension Cut update to distribute to fellow Teamsters
Central States Teamsters click here for a flyer from the Central States Pension Improvement Committee
The misnamed “Pension Protection Act” contains a dangerous provision that would allow troubled pension plans to cut benefits that members have already accrued—and even cut the benefits of Teamsters who have already retired for less than one year. Under current laws, these cuts are illegal. Only future pension accruals can be cut.
Not surprisingly, UPS management lobbied heavily for the bill’s passage (HR 2830). But the bill was also supported by the trustees on the Teamsters Central States Pension Plan. And James Hoffa himself hailed the bill as a “great first step.”
All 29 Republicans on the House Committee on Education and the Workforce supported the bill, introduced by Rep. John Boehner (R-Ohio), and all 22 Democrats refused to vote on the measure. The bill will be considered in other committees and by the Senate
Teamsters, take warning: this bill is dangerous. UPS management supports this bill because they want the Teamster Central States Pension Fund, and possibly other Teamsters funds, to be able to cut already-earned benefits.
If passed into law, the bill would reduce pension security for Teamster members—and all working families. That’s why the Pension Rights Center, the organization in Washington that protects and promotes the pension rights of American workers and retirees, opposes changes that allow cuts in earned pension credits.
Your Pension in Danger
The proposed bill would make it easier for a troubled multi-employer pension plan to go into “reorganization” status. Once a plan is in “reorganization” the trustees would be free to drastically cut benefits, even benefits already accrued.
If this happens, a Teamster with 30 credit years in Central States could possibly be told, “Sorry, your 30-and-out credits won’t work. You have work until you are 62 to get it.” Disability pensions could be cut, 25-and-out and 30-and-out benefits could be cut for working Teamsters and for those who are retired less than one year.
Only retirement benefits at “normal retirement age” would be legally protected. This is age 62 or 65 for most pension funds.
Employers, Hoffa Want More Power to Cut Your Pension
Under present law, these cuts are illegal.
UPS management wants that changed. So does the Hoffa administration. In a letter to all local leaders in February, IBT leaders complained that “Trustees are limited by ERISA and can only affect [cut] future accruals.” ERISA is the federal pension law that makes it illegal for pension plans to cut benefits that employees have already accrued.
Hoffa, sold his “Best Contract Ever” at UPS as well as the freight and carhaul agreements on the promise that our benefits would be protected. Now he is using your dues money to lobby Congress so Teamster plans can cut benefits that members have already earned! Hoffa’s own lucrative pension plan is unaffected by this proposal.
Why would the Hoffa administration do this? Because Hoffa and other top Teamster officials are intimidated by UPS management. UPS has told them either the company get pension cuts or they will try to pull out of the Teamster pension plans in the next contract.
Time to Fight Back, Not Give Up
Instead of caving in to the company’s threats three years before the next negotiations, our union leadership should be leading members in a fightback to protect our benefits. We should be lobbying Congress for pension reform that protects Teamster retirement security—not undermines it.
The IBT should be educating members about the threat that a UPS pullout would pose both to all Teamsters’ retirement security. Instead, the IBT has let UPS’s rumors and attacks on our pensions go unanswered.
Finally, the IBT should be mobilizing members to fight for adequate funding of our pension plans in the coming contracts. It may require some sacrifice such as reduced wage gains, but we can negotiate these increases.
In fact, on August 1 another sixty cents per hour will go into the Central States Pension Plan for UPS, freight, carhaul and certain other Teamsters. That increase alone will put nearly $100 million a year in new money into Central States. More of that can be done in the next contract.
What You Can Do
This is time for Teamsters to speak out. Write your Congressional reps and Senators. Urge them to oppose any pension bill that allows for cutbacks in earned benefits. Ask your union officers to do the same.
We also urge Teamster members to contact James Hoffa and tell him to use our dues money to fight to protect our benefits—not to lobby for legislation that will make it legal to cut pension benefits we have already earned.
Click here for a downloadable TDU Pension Cut update to distribute to fellow Teamsters
Central States Teamsters click here for a flyer from the Central States Pension Improvement Committee
Teamster Pension Funds Could Be Strengthened
June 6, 2005:It's no secret that United Parcel Service wants to pull all their employees out of Teamster pension funds. Like any corporation, they'd rather have unilateral control over their employees' pensions and convert them to 401(k) plans.
UPS took a step forward on that plan in May with the acquisition of Overnite. Now they have 10,000 less-than-truckload freight workers who are not in any Teamster plan, and they plan to grow that number as fast as they can.
Already outside our pension funds are at least half of UPS Teamster part timers. We can’t let this balance reach a tipping point: we need to bring Overnite workers into our funds now, and the rest of the part timers in 2008.
That’s why we have to organize UPS-Overnite, into our union and into our Teamster pension funds. Doing that would:
- Bring 10,000 new Teamster participants into our pension funds;
- Greatly improve pensions for Overnite workers and their families;
- Provide strong protection against a UPS pull-out from the funds; and
- Strengthen our funds by improving the ratio of active Teamsters to retirees.
UPS management is not to going to volunteer to pay better pensions to UPS-Overnite workers. Certainly they’re not going to be eager to strengthen our Teamster funds when management’s plan is to bust out of those funds.
UPS management has a three-point plan to undermine Teamster retirement security. Part one is a legislative attack. Part two is a campaign to soften up Teamsters with false promises of wonderful pensions from the company. Part three is taking advantage of the IBT failed leadership on pension issues.
The IBT needs a plan, too. A campaign to organize Overnite and bring those members into the Teamster benefit funds is a good place to start.
If UPS Ran Your Pension, You Would Lose $1,000 a Month!
$2,394 per month after 30 years of full time service: That is what UPS management would pay you for a pension, according to calculations performed by TDU. The calculation was based on UPS Senior Vice President John McDevitt’s testimony last year to Congress.
That’s about $1,000 per month less than Teamster plans provide.
What this means: If the same amount that UPS contributed into the Teamster pension plans since 1974 had gone into a 401(k) plan instead, and earned 7.5% a year, you would have an inferior pension today.
We calculated this figure by using the amount UPS paid into the pension fund each year since 1974 for a full timer who worked every day.
We used McDevitt’s own figure of 7.5% annual rate of return and UPS’ conversion formula from a lump sum to a monthly pension.
The calculations can be provided by TDU to interested members.
Central States Spin
May 4, 2005: Members of Local 407 received the letter below from their local. It’s a short summary of information provided to the local by the Central States Pension Fund. From the letter, its clear that the CSF is still spinning the numbers—if the fund’s financial situation is improving, isn’t it time to improve Teamster retirees’ financial situation?
Of course spun information is better than none at all. Thanks to member pressure over the last two years, the fund is finally releasing more information to members. Its important for Teamsters to keep informed and learn more about what’s going on with our pension and health and welfare contributions.
Click Here to See the Letter for Yourself
Of course spun information is better than none at all. Thanks to member pressure over the last two years, the fund is finally releasing more information to members. Its important for Teamsters to keep informed and learn more about what’s going on with our pension and health and welfare contributions.
Click Here to See the Letter for Yourself
New England Fund Reverses Some Cuts
April 29, 2005: The recently announced pension cuts in New England went over like a Yankees victory in Fenway Park. The angry uproar by members and local officers has pressured the New England Pension Fund Trustees to reverse two of their most unfair pension cuts announced in July.
The new is not all good. The restrictions on 25-and-out and 30-and-out pensions before age 57 remain in place. New England Teamsters who did not have enough years of credit by July 31, 2005 will not be eligible for 25- or 30-and-out until age 57. Unlike in the past, the changes did not include grandfathering provisions to protect Teamsters who were close to making their 25 or 30 years and were planning to retire soon. Members are calling for the fund trustees to grandfather existing negotiated promises. Teamsters who were close to qualifying under the old rules should have their contracts honored.
Change #1: No Punishment for Continuing to Work
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 and be eligible to retire at any age.
Change #2: Honoring Promises in Existing Contracts
Under the original cuts, Teamsters would have suffered a reduction in their pension accrual if they were covered by contracts that did not include annual increases in their pension contributions of 5 percent. 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.
The Pension Fund Trustees have backed off of this unreasonable rule. Now, the Pension Fund will honor all existing contracts by maintaining the accrual rate. When these contracts expire, the new contracts must include increased pension contributions of 5 percent a year to maintain the accrual rate.
Pension Reform, Accountability Needed
Both of the reforms to the original cuts address problems that were first reported by TDU. It remains to be seen whether membership pressure can convince the Trustees to introduce stronger grandfathering provisions that will protect Teamsters who were planning to retire under the old rules.
Teamster members and officers won these improvements by putting pressure on the Pension Fund Trustees. This 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 back reforms 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.
The new is not all good. The restrictions on 25-and-out and 30-and-out pensions before age 57 remain in place. New England Teamsters who did not have enough years of credit by July 31, 2005 will not be eligible for 25- or 30-and-out until age 57. Unlike in the past, the changes did not include grandfathering provisions to protect Teamsters who were close to making their 25 or 30 years and were planning to retire soon. Members are calling for the fund trustees to grandfather existing negotiated promises. Teamsters who were close to qualifying under the old rules should have their contracts honored.
Change #1: No Punishment for Continuing to Work
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 and be eligible to retire at any age.
Change #2: Honoring Promises in Existing Contracts
Under the original cuts, Teamsters would have suffered a reduction in their pension accrual if they were covered by contracts that did not include annual increases in their pension contributions of 5 percent. 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.
The Pension Fund Trustees have backed off of this unreasonable rule. Now, the Pension Fund will honor all existing contracts by maintaining the accrual rate. When these contracts expire, the new contracts must include increased pension contributions of 5 percent a year to maintain the accrual rate.
Pension Reform, Accountability Needed
Both of the reforms to the original cuts address problems that were first reported by TDU. It remains to be seen whether membership pressure can convince the Trustees to introduce stronger grandfathering provisions that will protect Teamsters who were planning to retire under the old rules.
Teamster members and officers won these improvements by putting pressure on the Pension Fund Trustees. This 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 back reforms 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.