Status Update: Central States Pension Fund
February 26, 2010: The good news: Central States assets increased $2 billion last year.
The bad news: The fund is still in deep trouble.
The assets of the Central States Pension Fund increased by some $2 billion in 2009, ending the year at $19.6 billion. That’s the good news.
The bad news is the fund continues to be in deep trouble, and will have to make 12 percent on its investments just to tread water and end this year with that same asset level.
Riding the stock market upturn last year, the fund made 27.5 percent on its investments.
But employer contributions to the fund were down by $211 million, due mainly to YRC’s pull-out.
Click here to download the Central States Financial and Analytical Report.
Still Hurting from UPS Pension Grab
If UPS were still a participating employer, they would have contributed some $660 million to the fund in 2009. That would have doubled the employer contributions received by Central States for the year. But Hoffa let UPS withdraw from the fund in the last bargaining round.
If UPS Freight was in the Central States Fund, that would have meant an additional $100 million in contributions last year. But the Hoffa administration inked a substandard contract that keeps UPS Freight out of all Teamster pension funds.
YRC, of course, has frozen pension contributions—costing the fund another $180 million last year. With these key employers not making contributions, the fund had to tap $2.1 billion of its assets to pay $2.7 billion in benefits.
Central States ended 2009 with 60,000 active participants, down from 84,000 a year earlier. This reduction was primarily due to the withdrawal of YRC from the fund in June 2009. Secondarily it was due to layoffs in other industries. The UPS pullout reduced the actives by 44,000 back in January 2008. The number of retirees has been steady at 212,000 for the past two years.
The fund remains in the “Red Zone” or critical status due to its unfunded liabilities.
Trustees, Benefits and Investments
The trustees of the fund—half Teamster officials and half employer reps—say they are not planning any further benefit cuts. The drastic cuts imposed in 2004, which eliminated 25- and 30-and-Out benefits going forward (while preserving credits already earned toward early retirement) remain in effect.
The other element of the fund’s rehabilitation plans is a requirement that contracts increase employer contributions by eight percent each year.
YRC’s trustee on the fund, Thomas Ventura, was asked to resign after YRC terminated its participation. He resigned in September, and the employer trustees appointed Art Bunte, the former head of Trucking Management, Inc, and employer negotiator with the Teamsters, to fill the position. The union and employer trustees also decided to give the next employer trustee position (in 2011) to the Association of Food and Dairy Retailers, Wholesalers and Manufacturers, and the 2012 appointment will go to ABF, which is presently the largest contributor to the fund.
YRC’s concession agreement requires them to resume participation in all Teamster pension plans next January, but there is considerable doubt about the credibility of that commitment.
Central States has 69 percent of its assets in the stock market, most of it managed by Goldman Sachs and Northern Trust Global Advisors; these firms were paid fees of $52 million in 2009.
Click here to download the Central States Financial and Analytical Report.
Will YRC Pension Contributions Resume in 2011?
February 26, 2010: YRC Teamsters—except in Chicago Local 710—have approved concessions that terminate participation in our pension plans until the end of this year, but resume on January 1. Will that plan work out—and is there a way to make it work?
These questions have serious implications for our freight division, our pension plans and our Teamster members and families.
Many YRC Teamsters worry this deal isn’t worth the paper it’s printed on. YRC’s pension obligation for 2011 will be about $15,000 per Teamster, or about $500 million for the year in total pension contributions.
It’s a safe bet that come January YRC will be pleading poverty and asking for an extension of the pension contribution freeze.
The Hoffa administration needs to level with the membership about its plans. Does the IBT intend to enforce the agreement or not?
If YRC legitimately can’t afford to make the pension contributions and stay in business, then what? Will Hoffa insist that YRC gradually increase its pension contributions?
And what about Teamsters who would be adversely affected by the pension contribution freeze?
Teamsters in the West have been promised “PEER 80” early retirement: a full pension if your age plus years of service adds to 80. But, if you have less than 25 years service, you do not qualify for PEER 80 if you have not worked for a contributing employer for one year when you reach 80.
If YRC does not come back in the fund early next year, many could be giving up their eligibility for early retirement, too. Does the Hoffa administration have a plan to protect these freight Teamsters?
What do you think? Click here to send your comments to the TDU Freight Committee.
Teamsters, YRC Team Up On Pension Legislation
February 26, 2010: The Teamsters and YRCW are working together to support proposed pension legislation that would help both the company and union pension plans.
It’s up to our union to make sure that Teamster retirees are protected in the process.
The Teamsters Union and YRCW are both supporting proposed legislation to strengthen union pension plans.
One aspect of the proposed legislation would give funds more time to recover from the stock market collapse. This is widely supported by industry, labor and multi-employer pension plans. The logjam created by disputes over health care legislation has meant this pension change has not moved forward, but hopefully it will be enacted soon.
Another part of the bill could lead to taking retirees from companies that have gone out of business and separating them out from our union pension plans. The legislation would strengthen union pension plans by making the Pension Benefit Guaranty Corporation (PBGC) responsible for some of their pension fund liabilities.
The Teamsters Union is supporting House Bill 3936, sponsored by by Earl Pomeroy (D-ND) and Pat Tiberi (R-OH), which would provide this funding relief.How the Bill Works
The Pomeroy bill would allow deeply troubled plans to “partition,” separating those pension obligations owed from companies that have gone out of business (think Consolidated Freightways, Preston, PIE, and numerous other companies) and putting responsibility for those pensions on the PBGC.
Under the bill, a plan like the Central States Fund could possibly partition. Central States would pay pension obligations for companies that are still in business. And the PBGC would pay the pension obligations owing from failed companies.
YRC backs this bill because it would save them huge pension obligations. They claim it would make it easier to re-join Teamster pension plans. And troubled pension funds like Central States could get much healthier.
This is win-win for Teamsters and employers like YRCW—as long as the pensions of all Teamsters are fully protected, and no “orphan” Teamsters are forced to take drastic pension cuts.
Our concern is that the bill could be amended to undermine that funding of so-called “orphan” pensions. Presently, the PBGC has a maximum pay out of only $1,080 per month for a retiree with 30 years of credits.
Corporate America—including YRC—doesn’t care if retirees get their full pensions. Their interest is in reducing their debt by moving so-called orphans out of the pension funds—even if Teamsters end up with reduced pensions from the PBGC as a result.
It’s up to our Teamsters Union to make sure that any bill that is passed would guarantee that the PBGC would pay full pensions and would have sufficient funding to do that.
The Teamster-backed Pomeroy bill provides these protections and deserves our support.Support the Pomeroy Bill
The International Union has said the right things on this issue. Now it’s time for action.
The Pomeroy bill could be a lifeline for pension funds and protect millions of American families who have worked hard and earned a decent retirement.
If we want to win these pension protections, the International Union needs to mobilize our members, other unions, and allies who care about the 10 million Americans in multi-employer plans.
Corporations are trying to eliminate pensions and replace them with 401(k) plans. Our Teamsters Union can take the lead in a campaign to save union pensions.
Teamster members should do our part. And we should also be on guard against changes to the bill that could cast vast numbers of Teamster retirees (and soon-to-be retirees) into second class status.
YRC and other corporations are looking to lower their pension obligations by shifting some costs on to the PBGC. That could be fine and even help Teamster pension funds—but not if it means labeling good Teamsters “orphans” and then cutting their pensions.
Ten More Years on the Job
“I’m a 31-year Teamster driver. I had one year left to go before I retired. I called up the hall, and I asked them point-blank if my benefits were going to be cut. They told me my pension was safe.
“I went down to Florida and put a down payment on a new house. Six months later, my local cut early retirement with almost no warning.
“I should be enjoying my retirement this year. Instead I’m looking at ten more years on the job.”
Luther Clark, New Penn, Local 355, Baltimore
Keeping My Eye On the New Bill
“I’m concerned about possible changes coming down the line with new federal legislation under the Pomeroy-Tiberi bill.
“I made a point of visiting my congressman to discuss pension protections and plan to do the same with my senators.
“It’s great that the IBT is paying attention to the issue but we have to make sure that our locals get involved and get working Teamsters talking directly with our representatives. We vote and they know it.”Greg Smith, YRC, Local 24, Akron, Ohio
Local 896 Teamsters Demand Right to Elect Stewards
February 26, 2010: Teamsters at the Anheuser-Busch brewery in Los Angeles are demanding a basic union principle: the right to vote for their chief steward.
They shouldn’t have to be petitioning for it, because this right is guaranteed in the Local 896 bylaws under Section 12.
But Rene Medrano and other Local 896 officials ignored the bylaws, removed the elected chief steward for the bottling and packaging department, then appointed another member and canceled a scheduled election.
“All we are asking for is the right to vote, and we expect to get it,” said Teamster Ray Szymanski. “It’s not a matter of whom you support. It’s a matter of doing what’s right.”
Brother Mag Zavala ran for Secretary-Treasurer in November 2009 and lost to the incumbent, Medrano. Since then there has been on-going retaliation. Zavala ran in January 2010 for chief steward and was duly elected by a majority of members in the bottling department, yet was not allowed to take office until the election was re-run.
The re-run was based on a frivolous charge of not posting a notice in a timely manner, which in fact was done within 48 hours of notification from the local. However, Local 896 leadership then denied Brother Zavala the right to run in the re-run election and, in fact, appointed another member who had lost the election.
This is not the first time the Local 896 officials denied members the right to elect stewards. Previously a steward was removed in the lab in the brewery, and at Coca Cola in L.A. and in Downey. These arbitrary steward removals are politically motivated.
The majority of bottling members have petitioned their executive board, and if they don’t get their bylaws enforced, they plan to pursue the issue through charges. Members are demanding their right to elect their stewards. The officials have been elected to lead, not to dictate.
Local 82 Members Will Clean Up Their Union
February 26, 2010: On trial for assaulting a member. Caught using thugs to dole out jobs under a sham contract. Under grand jury investigation.
IBT Trade Show Director John Perry is out of control. But Hoffa tells members there’s nothing he can do.
The International Union’s Trade Show Division Director is on trial for assaulting a member after he filed a grievance. So is his number one enforcer, a violent criminal named JoJo Burhoe who is on trial for beating a union member unconscious and sending him to the hospital.
Now, a grand jury is investigating them for intimidating witnesses to try to get the assault charges dismissed.
And an embarrassing affidavit has been leaked in which Perry, the Secretary-Treasurer of Boston Local 82, details how he put Burhoe and other thugs in charge of doling out trade show jobs under a sham contract.
Local 82 members have repeatedly contacted the International Union for help. Hoffa’s response? A signed letter saying the International Union can’t investigate members’ complaints or protect them from violent threats made by union officials.
In fact, Perry remains on Hoffa’s payroll to the tune of sixty grand a year.
TDU has obtained a confidential NLRB affidavit signed by Perry that reveals a scheme that puts Burhoe and other Local 82 enforcers in charge of doling out trade show jobs from nonunion employers.
According to Perry’s own testimony, a nonunion trade show employer contacts Perry about doing work in the local’s jurisdiction. Perry instructs the company to contact Burhoe who lines up the workforce. Burhoe’s friends are then put to work paid by “Union Payroll” which advertises itself as providing weekly “payroll processing and timely payroll delivery” in keeping with union contracts.
Under the scheme, Local 82 members who work or shape for legitimate trade show employers have no chance of performing this work. Union Payroll is, in fact, signatory to a collective bargaining agreement with Local 82. But the hiring procedure outlined in Perry’s affidavit makes a mockery of that agreement.
Local 82 members cannot shape for Union Payroll. Their only chance at employment is being on the private list of JoJo Burhoe or another of Perry’s enforcer pals.
Thugs, Assaults & Threats
The Union Payroll scam is just the latest example of what members say is a devil’s pact that Perry has made with a Boston goon squad. They provide Perry with muscle to control Local 82, in exchange for their control over who gets to work lucrative trade show jobs.
Burhoe’s rap sheet includes a conviction for armed bank robbery. Court documents reveal he has served as an FBI informant since his release from prison. He is currently on trial for violently beating Local 82 member Eddie Flaherty, who criticized Perry.
Perry himself is also on trial on charges he assaulted a Local 82 member.
A grand jury convened on Feb. 23 is investigating allegations that Perry and Burhoe threatened and intimidated witnesses to try to get the assault charges against them dropped.
The intimidation of witnesses included threats from Burhoe that he would “put them in a trunk of a car” or otherwise cause them severe bodily harm.
In January, Perry used the same threats in a letter to Local 82 Teamster Dave Corbitt who wrote to Perry that he was facing intimidation and retaliation for testifying before the Independent Review Board.
“To help clear up your stated confusion,” Perry wrote, “what would actually constitute intimidation or retaliation would, for example, be, someone threatening to put someone in a trunk of a car, intimating severe bodily harm; being followed and battered and punched for engaging in protected activity; having your ribs broken and being hospitalized for freedom of speech.”
Hoffa Turns a Blind Eye
Coming in the context of the legal proceedings against Burhoe for his threats against witnesses and his brutal assault of a Local 82 member for criticizing Local 82 officials, Corbitt took Perry’s letter as a threat and contacted the International Union.
In response, Hoffa sent Corbitt a signed letter saying, “the International Union does not have agents in the Boston area to provide protection to you or your family” and “does not have the capacity to investigate all of your numerous complaints.”
The Independent Review Board (IRB), the independent panel set up to investigate corruption in the Teamsters, is interviewing Local 82 members.
Local 82 Teamsters have shown they will take action to straighten out their local and build a strong union. They need protection to make it happen. They’ve asked Hoffa for help and been turned down flat.
Local 82 members will clean up their union.
Will New Grocery Contracts Save Jobs?
February 26, 2010: Contracts covering thousands of Southern California grocery and warehouse Teamsters are up this fall.
Teamster warehouse jobs are on the line.
Contracts expire in September for over 8,000 Teamsters in seven locals at some of Southern California’s biggest grocers and warehouses, including Albertsons, Ralphs, Vons/Safeway, Unified, and more.
The future of union jobs in warehousing is at stake. Just ask Teamsters at Ralphs.
This year, Ralphs opened a brand-new automated warehouse in Paramount, Calif. that uses new technology to select cases, prepare orders, and wrap pallets—drastically cutting the number of Teamsters needed to do the job.
In April, Ralphs is planning the first wave of lay-offs. Eventually, the company expects that over 240 workers will lose their jobs to the Paramount facility.
Next year, there will be more cuts when the company remodels a portion of the existing Perishable Service Center in Compton with a new automated perishable section—threatening many of the over 400 Teamster warehouse jobs there.
Save Union Jobs
Automation is spreading slowly. The machinery is extremely expensive.
But it is coming.
Language that is negotiated in this bargaining round can help protect Teamster jobs for years to come. What do we need?
- Job training. Automation will kill some jobs. But it will also create new maintenance jobs. Train warehouse workers for new jobs in maintenance and driving.
- Bring nonunion work into the union. The new facilities still need people to unload trailers. Nonunion lumpers have taken over many jobs that used to be Teamster. Require Teamsters to unload trailers.
- Recapture lost outsourced work. The current contract was five years long. This contract will probably be a long one, too.
You can bet employers are planning that long in advance. Our union needs to fight for language now that prepares us for the new technology that’s coming down the road.
Business as Usual?
Last year, Local 630 principal officer Paul Kenny negotiated an early contract for warehouse Teamsters at Sysco and U.S. Foods that gave up night and weekend premiums.
Another sticking point could be seniority rights. It’s no secret we’re bargaining in a tough economy. Will more Teamster officials be tempted to trade in our working conditions and Teamster standards like Kenny did last year?
“I’ve been working at Unified for 21 years, and I’ve always trusted that someone else will get the job done,” said Dan Nash, a Local 630 member at Unified in Santa Fe Springs.
At Unified, the company has been violating members’ seniority rights on holiday extra work. Members are pushing for less ambiguous language.
“This year the stakes are just too high,” said Nash. “I’m paying attention and I’m going to make sure my voice is heard early.”
Time to Do Our Part
“I’ve worked at Unified for 21 years, and I’ve always trusted that someone else will get the job done.
“This year the stakes are just too high. I’m paying attention and I’m going to make sure my voice is heard early.”
Dan Nash, Unified Local 630, Santa Fe Springs, Calif.
Letters from our Members: Proud of TDU
February 26, 2010: Over the years TDU has been a very effective and informative organization.
We have taken on the fight to improve all Teamster members’ quality of life within the union. We have fought and won many victories for the members: winning major grievances, overturning terminations, back pay, better health benefits and better pensions—just to name a few.
Workers have precious rights and TDU has always fought to ensure that these rights are upheld.
It’s just a great organization and I have always been very proud of our achievements and accomplishments for so many with so little. Let’s all join in to help.
Gary Lewis Sr. Local 41, UPS (retired) Kansas City, Mo.
Letters from our Members: Two Enemies
February 26, 2010: Congratulations on a very informative Teamster Voice. While reading it, it occurred to me to remind our fellow Teamsters that instead of one enemy, the greedy corporations, we have two: the leadership at the IBT who go along with the corporate chiefs and threaten any member who dares to stand up for working Teamsters.
Tiered wages must be eliminated. Guaranteed personal time off. Set a limit on forced overtime. No more excessive elimination of jobs until there is documented proof of loss of freight. This would get some of our laid-off people back to work.
The one item that always bothered me most was the pension plan. Why are there so many formulas? Why is there so much difference between what different Teamsters make when they retire?
Our next IBT president must address these issues.
Hector Canales Local 406, YRC (retired) Grand Rapids, Mich.