April 16, 2013: Three thousand Teamsters, active and retired, headed to the union hall in Kansas City. What sparked the monster turnout and what does it say about Teamsters and our pensions?

Over 250 people showed up at the Local 41 union meeting last Saturday. Another 3000 retirees showed up for a meeting that afternoon.

What sparked this monster Teamster turnout? A report from Central States Pension Fund representatives, after TDU broke the news that the pension fund and the Hoffa administration are lobbying to pass a new law that would allow Central States to cut pensions, including for current retirees.

The turnout shows that Teamsters in the Central States are deeply concerned. If you're one of them, keep reading.

Find out what Al Nelson, a top Central States administrator said about pension legislation that could lead to benefit cuts. And learn what Teamsters, active and retired, are doing to defend their pensions.

Kansas City, Here I Come

Teamsters turned out for the meetings in Kansas City in record numbers. They filled the hall. They filled the parking lot. Cars were parked on grass and all over the neighborhood. Police came to help unclog the traffic. Some 1500 retirees were able to get into the hall, while others had to be turned away.

Teamsters came for information. But it could be the birth of a movement, a movement to defend our pensions.

"We should have had media there, and invited Congressional people," UPS driver Wes Epperson told us. "We need busloads of Teamsters and retirees visiting our Congressional representatives, not just backroom lobbying by Pension Fund officials."

Epperson hit the microphone at the union meeting to question Al Nelson, the Benefits Services Director of the Central States Fund. 

Nelson started off with a routine report, noting the investment returns of the fund, etc. But the members' questions changed all that.  Here is what came out:

• Nelson said that allowing UPS to pull out of Central States in 2007 was a mistake, and that the fund opposed it, but could not stop the deal between UPS and the Hoffa administration.

• Nelson admitted that Central States and the IBT are part of the lobbying group behind the document "Solutions not Bailouts", which calls on Congress to enact a new law this year to allow “deeply troubled” funds (Central States) to slash pensions. 

• When questioned, Nelson admitted that their plan is to cut all pensions across the board now, with the intention of keeping the fund solvent longer.

Some members dropped F-bombs, but the main discussion was respectful and driven by well-informed members concerned about their pensions. And Nelson gave them answers.

Pension Legislation Smoke & Mirrors

At the second meeting of the day, the one for retirees, Nelson was startled by the big crowd and eager to put the right spin on things. This time he said the Solutions not Bailouts document is not an official Central States position, but just an opinion paper by some individuals.

If you believe that, we've got some high-priced YRC stock to sell you.

The fact is that the pension coalition that the IBT, UPS, and Central States Fund have joined has hired lobbyists, led by former Congressman Earl Pomeroy, to get legislative changes introduced into Congress this year.  

Pomeroy recently told a conference of actuaries that the recommendations in Solutions not Bailouts "are being drafted into bill language, and an effort to engage legislative interest has already begun."

Nelson told the retirees that their pensions cannot be cut if they have already received 13 checks. Many retirees left the room, happy to hear that. But Nelson forgot to mention that this could all change if the Congressional action being pushed for by Central States, UPS and Hoffa gets passed.

Retiree Dave Scheidt questioned Nelson and told us that "It should be about solidarity. In my 32 years as a Teamster, we have stood up for each other. On the Overnite strike line, and lots of other times. We should be doing the same to defend the pensions of all Teamsters."

Every Teamster we spoke with commended Local 41 for sponsoring the meeting, and mailing a notice to all retirees, who otherwise would never have known about it.

Should your local do the same? All it takes is an invitation to the pension fund, a notice to stewards, and a mailing to all retirees.

Teamsters Taking Action

The massive meetings in Kansas City shows Teamsters care about their pensions. They deserve information and a plan of action that brings members and retirees behind legislation that protects our pensions.

Members in some cities are starting to ask their Local to organize a Teamster Pension Meeting with a rep from the Central States.

"We need meetings here in Memphis, as well as all across the Midwest and South," said Willie Hardy, a Local 667 retiree and TDU organizer. "Members need information, and we need a grassroots campaign to defend our pensions."

You can be a part of this movement to defend Teamster members' pensions. 

Contact TDU for help. We'll help you put together a petition for a Teamster Pension Meeting with Central States in your local. 

TDU will also be organizing rank-and-file meetings to inform members about pension legislation and what action we can take to defend our pensions.

There is also talk about forming a Pension Defense Committee for all Central States retirees and Teamsters. If you want to be part of the solution, click here to send a message to the TDU with your ideas or questions.

March 15, 2013: Some 50,000 UPS Teamsters stand to draw a pension from the Central States Fund, even though UPS was allowed to pull out of that fund in 2008 and set up their own IBT-UPS Pension Plan, run by the company.

The way it works is that UPS pays the pension until the retiree reaches 65. Then Central States pays its share of the pension (which would be most of it), and UPS makes up the difference with a second pension check, to provide the promised pension benefit.

Will they lose if Central States cuts pensions? The answer is found in Article 34, Section l, paragraph (l)(6) of the national contract: "If the benefit paid from the Central States Plan is reduced as permitted or required by law, the amount of such reduction shall not be included in the offset."

The Hoffa administration says that single sentence protects UPS Teamsters.  But experience with contract enforcement at UPS is that ambiguous language often hurts members.

It should be easy to fix this issue in contract bargaining with clear, unambiguous protection for retirees from Central States pension cuts.

March 15, 2013: Instead of parroting the employers who want to cut our pensions, our Teamsters Union should be proposing positive legislation to protect workers' hard-earned benefits. How about these ideas:

• Build a coalition of unions, retiree groups, AARP to push for positive legislation to protect and shore up pensions.
• Propose enhanced protection from the Pension Benefit Guaranty Corporation (PBGC). It is presently funded by tiny contributions from various pension plans: increase them to provide real insurance for benefits.
• End the discrimination in benefit protection against multiemployer (union) plans by the PBGC: raise the covered benefit level, which is now only about $1,100 per month for a 30-year Teamster.
• Put forward a version of the bill proposed by Senator Bob Casey (D-Pa.) in 2010, to protect the pensions of workers whose companies have gone bankrupt or moved production offshore. This protection would be a godsend to our Teamster pension funds and retirees.

Teamster members, retirees and local officers (who are covered by the same pension plans) can and will join in such an effort. Give Teamster political money only to politicians who support our right to our earned pensions. It's up to the International union to take the lead.

March 15, 2013: The third quarter financial report on the Central States Pension Plan indicates that the fund had $18 billion in assets as of the end of September 2012.

This means the fund held its own for the first nine months of 2012, but surely fell behind in the fourth quarter, when the stock market made no gains. The fund has 30 percent of its total assets pegged to the S&P 500 index of the stocks of the largest U.S. corporations, which were flat in the fourth quarter. The full-year 2012 report is not yet available.

The Independent Special Counsel Report for the third quarter states that 35 bargaining units have left the "old" portion of the Central States Fund, and qualified as "new" employers, by paying down their withdrawal liability. The fund has not identified which employer units these are. The financial report does not reflect much income in withdrawal liability money from this new "hybrid" plan adopted by the fund.

For the Independent Special Counsel report and an explanation of the new "hybrid" pension fund which is getting popular with companies in Central States and in the New England Fund, and other pension information, click here.

Concerned about pensions? Contact Teamsters for a Democratic Union at 313-842-2600. You can join TDU, the movement fighting to protect our pensions by calling us or clicking here.

February 26, 2013: The Hoffa administration has signed on to a joint employer-union proposal to allow "deeply troubled" pension funds to slash accrued benefits, even for Teamsters who have already retired.

This proposal, which could be aimed squarely at the Teamster Central States Fund, comes from the National Coordinating Committee for Multiemployer Plans, a committee of employers, unions and pension plans.

UPS is a prominent member of the group, which also includes several pension funds, employer groups, and some unions.

The group's proposal is to change federal law to allow "deeply troubled" plans, those in danger of going insolvent in the next 20 years, to drastically slash benefits. 

These Pension Funds could slash benefits to as low as just 10% above the guaranteed rate set by the Pension Benefit Guarantee Corporation. For a retiree with 30 credit years, that rate is currently less than $1100 per month! 

If new legislation along these lines is approved, the Central States Fund could eventually slash pensions by over 50%.

Under present law, that kind of cut in accrued benefits is illegal.

The Teamsters Union, the Central States Fund and the Western Conference of Teamsters Fund have joined with employers and some other unions to back this proposal.

The justification is to avoid having pension funds go insolvent down the road. 

This is a worthy goal but the only "solution" put forward is to slash earned pensions.

Solutions Not Bailouts is the title of the full report issued by the pension committee. Many of its proposals are positive and reasonable. But the central proposal could be a dagger to tens of thousands of Central States Teamsters. 

Consider the case of Greg Smith, an Ohio Teamster who retired from YRC after 29.5 years with a monthly pension of $3019.

If Central States goes bankrupt, the Pension Benefit Guarantee Corporation would pay Smith a monthly pension of about $1100.

The "alternative" being backed by the Teamsters would allow the Central States to cut Smith's pension to as low as $1210!

"Our union should be fighting for legislation that protects our pensions. We all know that Central States is in trouble. No one expects miracles. But the whole point of having a union is to fight for a square deal. This is just a surrender," Smith said.

It's not too late for the Teamsters Union to change course. The pension proposal is in its early stages. But Teamster members and retirees need to make their voices heard.

Millions of workers, retirees and our families depend on union pensions. Our union should be working other unions and seniors' groups to increase PBGC protections for our pensions, not backing legislation so our own union pension funds can sock it to us. That's not a bailout, it's just common sense.

Click here to download a full copy of the report, "Solutions, Not Bailouts."

To help us work to protect good Teamster pensions, join TDU.

"Hoffa and the IBT need to be fighting to protect our pension benefits, not helping the companies and Central States find ways of weaseling out on what they owe us.

"Changes may be coming but we need a leadership that puts members' first and has a plan for protecting our retirement future and doesn't just bow down to what the companies want."

Michelle Glessner, ABF
Local 957, Dayton, Ohio

February 8, 2013: The third quarter financial report on the Central States Pension Plan indicates that the fund had $18.0 billion in assets as of the end of September 2012.  

This means the fund held its own for the first nine months of 2012, but surely fell behind in the fourth quarter, when the stock market made no gains. The fund has 30% of its total assets pegged to the S&P 500 index of the stocks of the largest US corporations, which were flat in the fourth quarter. The full-year 2012 report is not yet available.

The Independent Special Counsel Report for the 3^rd quarter states that 35 bargaining units have left the “old” portion of the Central States Fund, and qualified as “new” employers, by paying down their withdrawal liability. The fund has not identified which employer units these are. The financial report does not reflect much income in withdrawal liability money from this new “hybrid” plan adopted by the fund.   

An explanation of the new hybrid plan is available here. 

The third quarter Financial and Analytical Report on the fund is available here.

Concerned about pensions? Contact Teamsters for a Democratic Union at 313-842-2600 or click here to send us a message. You can join TDU, the movement fighting to protect our pensions, online by clicking here.

Read TDU's report Could the Central States Pension Fund Go Insolvent? here.

November 20, 2012: Two of the biggest Teamster Pension Plans have adopted a new pension model. What does it mean for members' pensions?

Both the Central States Fund and the New England Pension Plan have a new pension model that may affect tens of thousands of Teamsters.

Why are employers pushing for the new "Hybrid Plan" model? What will it mean for Teamsters' pensions?

Companies are getting increasingly aggressive about getting out of defined-benefit union pensions. One big reason is employers don't want to have withdrawal liability, that is, debt owed to pay for pensions that Teamsters and retirees have earned.

In 2007, the Hoffa administration let UPS pay off its withdrawal liability, pull out of Central States and set up a new plan for UPS Teamsters only. That move put the Central States Plan on the brink.

Now the Central States and New England Pension funds are offering employers a different model.

Under the Hybrid Plan, companies pay down their liability and stay within the Teamster pension plan at the same time.

As of October 2012, some 17 employers in the Central States Fund have switched over to this arrangement and another 25 in the New England Fund.

The Hybrid Plan model has not been adopted by the Western Conference of Teamsters Pension Trust.  That fund already operates at close to full funding so employers have already eliminated withdrawal liability as an issue.

So far only small units have switched in the Central States, but they include some large companies such as Republic Waste.  In New England, UPS, DHL, and some other corporations have done so.

In the future, other companies may make this switch. Will ABF push for this change? Stay tuned.

Click here to read more about Hybrid Pension Plans.