June 8, 2007: UPS management has put a dangerous proposal on the table: to pull UPS Teamsters out of the Central States Pension Fund, the plan that covers 42,000 full-timers in 25 states.

Under the law, UPS would have to pay $4 billion in withdrawal liability to the Central States to break out of the fund—a penalty management is happy to pay because they can make it up over time by reducing future benefit costs.

Our union has always opposed pension grabs by UPS in the past because the company’s goal is to weaken our union and our benefits. In 1997 we defeated the company on the issue and won major benefit improvements.

But this time, the Hoffa administration may go along the company’s plan, calling it “a serious proposal that must be seriously evaluated.” The entire contents of the last Teamster UPSDate was dedicated to talking about management’s proposal—without a single word on what the union’s proposal is.

Pension Improvement?

UPS’s pension grab would hurt our union in the long run—in exchange for not much benefit in the short run.

Under the company’s initial proposal, the UPS-only fund would pay a 25-and-out benefit of $2,500, a 30-and-out benefit of $3,000, and a 35-and-out benefit of $3,500. Benefits would be capped at a maximum of $3,500 a month no matter how many years you work.

At $100 per year of service, the proposed UPS pension would actually pay less than Central States, which pays $123 per year of service. And that number will go up at least eight percent a year, so Central States will pay about $175 per year by the end of the next contract. The main improvement is that the UPS-only plan would restore early retirement by eliminating the six percent per year penalty for retiring before 62.

Of course, UPS can sweeten the pot and improve their initial offer. We fully expect that to happen.

But UPS Teamsters shouldn’t have to be pulled out of Central States to get the benefits they deserve. It’s our union’s job to win full 25 and 30-and-out benefits at any age and affordable retiree healthcare in a Central States plan.

The reason is simple: breaking apart the Central States Fund will weaken our union and put members’ benefits at risk.

Long Term Problems

UPS’s proposal would establish a UPS Pension Plan, with management officials and Hoffa administration Teamster officials as trustees. A Teamster vested in the Central States Plan would in the future draw two separate checks, which would add together to make up a pension.

Central States would not give up funds that have been contributed over the years. They would stay there and provide a partial pension, while the UPS Plan would pay the rest of the pension. Healthcare and retiree healthcare would continue to be provided by Central States.

By breaking up and weakening the Central States Fund, management’s proposal would put UPS members’ future pensions at risk. UPS currently contributes $500 million per year to Central States. That income, which grows each year, would be gone forever.

If the big freight companies follow UPS’s example and pull out, the Central States Fund would be even worse off. The CEO of ABF now says busting out of the Teamster pension plans is his top bargaining goal.

UPS Teamsters would still depend on the fund for a large part of our pension. It would not be smart to weaken the fund by supporting a pullout when we will still need the fund to support our retirement.

Real Problem; Wrong Answer

UPS’s proposal for a UPS-Teamster plan covering the Central States has been tried elsewhere. Let’s look at the results.

Local 804 in New York is a UPS-Teamster plan just like the one being proposed for the Central States. Over the last ten years, that fund’s investments have performed worse than Central States. At the beginning of this year, UPS’s trustees forced through a 30 percent pension cut.

Now UPS is trying to push through a pension cut in New Jersey Local 177—another UPS-Teamster fund. That decision is before an arbitrator.

Both of these plans are based in Atlanta, at UPS headquarters, with all employer trustees being UPS management. They show that a UPS-Teamster pension plan would not be a magic bullet.

Realistic Solutions

Early bargaining gives us leverage. We need to use it to win benefit improvements for UPS Teamsters in the Central States Fund and all Teamster pension plans, including:

Affordable retiree healthcare. Cuts in retiree healthcare are the number one obstacle to members retiring at 25-and-out 30-and-out—and the easiest benefit cut to restore. We need to substantially increase contributions to Teamster Health and Welfare funds so that our health benefits are protected and affordable retiree healthcare is immediately restored.

A timetable for improvements in all pension plans in writing at the time of ratification so that Teamsters in all funds will know that our pension benefits will be restored and increased as increased contributions build up in our funds. In 1997, UPS Teamsters got a document from Central States—before we voted on the contract—telling us in writing what our benefits would be if the contract was ratified.

Include UPS part-timers in all Teamster pension funds. Part-timers are already covered by Teamster plans in the West, New England and Upstate New York. As a result, part-timers in these areas receive superior pension benefits and the contributions for part-timers who do not vest are used to strengthen Teamster pensions, not to line the company’s pockets.

These are achievable goals. There’s no reason to give UPS an early deal unless it delivers the benefit improvements that Teamster members need today—and the stronger benefit funds that Teamster members will need tomorrow.

June 8, 2007: UPS management has been trying to win control over our pensions for years. After Teamsters defeated UPS’s pension grab in 1997 and won major improvements in our benefits, it looked like management’s dreams were finished.

Then the 2002 “Best Contract Ever” and the pension cuts of 2003 breathed new life into management’s old ambitions to get control over our pensions.

UPS Teamsters are angry over the cuts and they’re looking for answers. Management is trying to play off our anger to revive their efforts to take over our pensions. The company wants to convince Central States Teamsters that they will look out for our pensions.

When it comes to big promises, actions speak louder than words. The fact is management hasn’t been looking out for our retirement; they’ve been leading the attack on our benefits. Just look at the UPS record:

• UPS management’s representative to the Central States Pension Fund voted to cut our pensions and opposed a motion by our union trustees to increase employer contributions.
• UPS management’s representative to the Western Conference of Teamsters Pension Fund voted for benefit cuts, even though that fund is 100 percent funded.
• There are two UPS-Teamster plans like the one being proposed for the Central States and management has pushed for pension cuts at both. UPS’s trustees forced through a 30 percent pension cut in New York Local 804, and they are trying to cut benefits in New Jersey Local 177, where the issue is deadlocked to an arbitrator.
• UPS management refused to pay millions of dollars owed to two pension funds, in Virginia and New York. In Virginia, management stopped making required pension contributions when members were on vacation.
• UPS has been the number one supporter of legislation that would make it easier to cut our benefits.

UPS’s record shows that the company can’t be trusted with our benefits. But many UPS Teamsters will say Hoffa can’t be trusted either. After all, Hoffa promised that the “Best Contract Ever” would protect our benefits.

True enough. But we’re not going to get even with Hoffa by jumping for a bad proposal from management. Remember, management’s plan to break up the Central States Fund will only go to a vote if Hoffa is backing it.

Hoffa and UPS sold us a bill of goods in 2002. The answer isn’t to fall for a bigger bill of goods now. UPS is under pressure from stockholders and shippers to reach an early agreement. This gives us leverage. Let’s use it.

UPS Teamsters should not ratify any early agreement unless we have it in writing that the contract will restore affordable retiree health coverage and gives us a written timetable for restoring our pensions.

We can win these improvements without letting UPS break apart the Central States fund and weaken our retirement security over the long run.

June 8, 2007: As negotiators for UPS and our union square off over the pension issue, members in the Eastern Region’s two largest UPS locals want to know whether early bargaining will deliver a real pension increase—or a freeze that keeps benefits at pre-pension cut levels.

New York Local 804 and New Jersey Local 177 were the first Teamster locals in the nation to win 25-and-out and 30- and-out pensions. UPS management controls all of the employer trustee positions at both of these funds—and has used its authority to push for pension cuts.

UPS trustees pushed through a 30 percent cut in the pension multiplier at Local 804 effective Jan. 1 this year—over the opposition of Local 804’s trustees to the fund. In Local 177, Teamster trustees have blocked UPS’s demands for pension cuts so far, but the issue is in arbitration.

Local 804 members circulated petitions calling on the union to let members know what needs to be won in bargaining in order to reverse the cuts and increase benefits. The International requested this information from all of the benefit funds that cover UPS Teamsters, including Local 804 and Local 177. But this information has never been shared with the members.

“It seems like the plan is to restore what we lost and sell it to us like we gained something,” said Jorge Diaz, a package car driver from Local 804. “But to me, that’s not gaining anything. That’s a pension freeze.”

“We’re not being told anything, In 1997, we knew what the company was proposing and what the union was fighting for. We won higher pensions. We shouldn’t settle for a freeze this time.”

“That fund is not 100 percent funded. When that fund gets to 100 percent based on their rules, they’ll do the right thing.”

Tom Keegel, IBT Candidates Forum, Aug. 25, 2007

“The Plan’s vested benefit liabilities are 100 percent funded.”

Memorandum to Local Union Officers from Western Conference of Teamsters Pension Trust
August, 2007

More than nine months ago, the Hoffa administration promised Teamsters that the Western Conference of Teamsters Pension Trust would end the pension cuts when the fund was 100 percent funded. But the cuts continue even though the plan is 100 percent funded.

The Hoffa administration’s promise “to do the right thing” was always an empty one. Before General Secretary Treasurer Tom Keegel even made it, the WCT Pension Trust had already issued a memo to local union officers in the West that, “The Plan’s vested benefit liabilities are 100 percent funded.”

The fund issued another letter on Nov. 13, this one from employer chair Bernard T. Eilerts—reaffirming that the fund was 100 percent fully funded.

Three days later, the fund announced a change in the multiplier. But instead of restoring members’ benefits as promised, the fund raised the multiplier only slightly. The new rate was only 1.65 percent, nearly 40 percent lower than the historic minimum rate of 2.65 percent.

IBT Vice President and union trustee Randy Cammack announced at a recent Local 63 meeting that the multiplier will be increased. That’s long overdue. As a result of the cuts, the annual pension of UPS, freight and many warehousing Teamsters in the West has been reduced by more than $6,000 a year.

The UPS contract will set a new record for pension contributions into the fund. That money must be used to restore the benefits that Western Teamsters have lost and restore the multiplier.

UPS has been the number one player behind the scenes pushing Teamster pension plans to lower benefits. Before they vote on any early deal, UPS Teamsters deserve to know how much of their pension benefits will be restored and what the pension multiplier will be going forward.

A new bulletin and a detailed Q&A on management’s plan to split 42,000 UPS Teamsters from the Central States Pension Plan is available online.

Click here to get the latest info at MakeUPSDeliver.org

May 16, 2007: Jim Hoffa and Ken Hall promised that early negotiations would send a message to every Teamster employer not to mess with our pension funds.

With UPS and other employers trying to break out of the Central States, what message will we send now? See Ken Hall’s pledge to the Teamster Convention.

May 16, 2007: Ten years after the 1997 UPS strike, former General President Ron Carey spoke in New York about some of the keys to the union's contract victory. "You don't keep members in the dark, you don't have secret negotiations," Carey said.

Carey’s advice for members? "You have the right to get answers from your leadership. Responding in a very activist way is the way to go."

By MEREDITH KOLODNER, The Chief—Public Employees Weekly

Nine years after he was deposed as President of the International Brotherhood of Teamsters, Ron Carey was all fire and no remorse last week when he spoke about the legacy of the successful national strike a decade ago against United Parcel Service.

The room that Mr. Carey spoke to May 7 was full of labor advocates but devoid of Teamsters, since he is barred for life from contact with them. The occasion was the book launch of "Outside the Box," which chronicles media coverage of the UPS strike and explains how the Teamsters were able to capture the national imagination in August of 1997 with the claim that "part-time America doesn't work."

Out But Still Outspoken

Mr. Carey was removed as president by the IBT's Federal Internal Review Board two days after the strike ended due to an illegal money swap scheme carried out by his political advisors, but his time in exile does not seem to have dulled his penchant for speaking out. He argued that successful strikes were still possible if the membership was informed and prepared, defended his 1993 role in removing Barry Feinstein as president of Local 237, and criticized the growing salaries of union leaders.

"I think we're at a crossroads right now, and I think it can be very difficult," he said. "I look at the dim picture coming out of the labor movement and I wonder, are we just heading backwards?"

But Mr. Carey argued that the prescriptions for labor's ills were little changed from when he was in power, indicating that problems with some recent strikes, including the 2003 United Food and Commercial Workers grocery strike in California and the 2005 city transit strike, stemmed from lack of preparation on the part of the leaderships.

Must Clue In Members

"We were thinking for two years about what we had to do before we ever went on strike," he said. "You don't keep members in the dark, you don't have secret negotiations and then tell people, 'It didn't work out, so get behind us and follow us.'"

The former UPS driver argued that member involvement in the process was key. "We put rank-and-file members on the committees, we educated our members, and we told them don't be afraid to talk to the press," he told the crowd at Stony Brook University's Manhattan offices.

Mr. Carey acknowledged that the state's Taylor Law, which imposes massive financial penalties on public workers for striking, made the situation more difficult, but he held to the conviction that labor could win if it kept the upper hand.

"What [management] wanted was to push us into the street, not having all the t's crossed and the i's dotted," he said, "and the end result was the members would have suffered. Their last and best offer came 25 times."

'Have Right to Answers'

He also had advice for members in unions where the leadership seems unresponsive. "You have the right to get answers from your leadership," he said. "The local leadership will turn their back on the international leadership if you push. Responding in a very activist way is the way to go."

And some leaders, Mr. Carey argued, need to be challenged. In response to a query about Service Employees International Union President Andy Stern's decision to appear with Wal-Mart management to advocate for expanding health-care insurance, the former president's voice jumped an octave: "What, did he just fall off a turnip truck?" he asked.

Mr. Carey, like many of his supporters, still believes that the government targeted him because of the success of the UPS strike, and stands by his claim that while his advisors broke the law, he had no knowledge of their actions. After serving as the president of Local 804 in the city, Mr. Carey was elected general president of the Teamsters in 1991 in the first secret-ballot rank and file election in the history of the union. He was removed because of a scheme in which $885,000 in Teamsters funds was donated to progressive political organizations in 1996 in return for $221,000 in contributions to the then-Teamsters president's re-election campaign.

Beat Perjury Rap

Mr. Carey was never accused of participating in the plot, but was charged with perjury for proclaiming his innocence and lack of knowledge about the plan in front of a Federal grand jury and other court-appointed bodies that monitored the Teamsters. In 2001, a Manhattan Federal court jury found Mr. Carey not guilty of seven counts of perjury.

He maintains that having government involvement and oversight inside labor unions is damaging.

"I think it's a joke," he said of government monitoring. "One of the issues I had with the so-called Internal Review Board, I had a problem with how much money they were making and I said to Judge [Frederick] Lacey [the outside monitor], 'This is ridiculous; I'm not going to sign this check.' That was the first month I was in office, so we had a very bad relationship. They just gouged the union."

His experience with the law, however, has not shaken his conviction about his push to have Judge Lacey remove former Local 237 President Barry Feinstein after he was accused by then-Federal Investigator Charles M. Carberry of improperly spending $500,000 of members' dues money on personal expenses, including a penthouse apartment on the Upper East Side. Mr. Feinstein, who had protested that all the expenditures were approved by the Local 237 board, agreed to step down and repay the local $104,000. "I removed Barry," Mr. Carey said. "I personally thought Barry was a very decent human being, he was a good labor unionist, and it was very difficult for me to do. But he broke the rules, and when you break the rules, there's a price to pay; there's no exceptions."

Not Losing Hope

Mr. Carey said he continued to believe that some current union leaders were helping themselves to too much of members' dues money. "I took a decrease in pay when I first got into office," he said. "I don't think anyone should be making a quarter of a million dollars. The treasury is the members' money; it isn't the union officers' money."

Mr. Carey is no longer directly involved in union politics, and said he is working with some retirees' groups and concentrating on being a good grandfather. But he said he still closely follows the developments in the labor movement.

"I'm not going to lose hope," he said. "Somebody's going to come along who's going to put the fire up the unions in this country."

May 9, 2007: Management has put a proposal on the table to pull UPS Teamsters out of the Central States Pension Plan – the plan that covers 42,000 full-timers in 25 states.

UPS wants to create new pension plan to be run jointly by trustees from UPS and the Teamsters—similar to the Local 804 plan where the company recently forced through a 30 percent pension cut over the opposition of Teamster trustees.

Management knows what they want and they’ll throw money at us to get it. To pull out of Central States, UPS would be legally required to pay some $4 billion to the fund in withdrawal liability. The company sees this is as an investment in weakening our union, dividing UPSers from other Teamsters, and busting up Teamster pension plans.

According to the CEO of ABF, another company that wants to break out of Teamster pension plans, the withdrawal penalty can easily be made up over time in company savings on future benefit costs.

The Hoffa administration is considering accepting the proposal, calling it “a serious proposal that must be seriously evaluated.” Many Teamsters believe it is a done deal.

Pension Improvement?

UPS’s pension grab would hurt our union in the long run—in exchange for not much benefit in the short run.

Under the company’s proposal, the UPS-only fund would pay a 25-and-out benefit of $2,500, a 30-and-out benefit of $3000, and a 35-and-out benefit of $3,500. Benefits would be capped at a maximum of $3,500 a month no matter how many years you work.

At $100 per year of service, the proposed UPS pension would actually pay less than Central States which pays $123 per year of service. The main improvement is that the UPS-only plan would restore early retirement by eliminating the 6 percent per year penalty for retiring before 62.

Of course, UPS can sweeten the pot and improve their initial offer. We fully expect that to happen, and we understand that many UPS Teamsters may be open to company proposals that restore cut benefits.

UPS Teamsters shouldn’t have to be pulled out of Central States in a company scheme to get the benefits they deserve. It’s our union’s job to win full 25 and 30-and-out benefit at any age and affordable retiree healthcare in a Central States plan.

In 1997 when UPS management tried a similar pension grab, Ron Carey backed UPS off and won enough benefit contributions to increase our Teamster pensions. That’s a positive example to follow.

Long Term Problems

Employers often sweeten their offer in an effort to weaken our union. That’s what’s happening here. The implications for our pension funds and the future of our union are huge.

If UPS is allowed to bust out of Central States, which fund is next? Other employers will want to follow. ABF’s CEO says busting out of the Teamster pension plans in the NMFA bargaining is his top goal.

The Central States Fund would lose its largest and youngest group of participants. We should be building our pension plans, not managing their decline or demise. That’s not union leadership.

Our union needs to organize. The multi-employer pension plans are a key selling point to bringing in members and building our union for the future.

Our union needs to think long term. Not just this year or this contract. A UPS worker who is 35 right now could well be drawing a pension 50 years from now. Sure, UPS is the big dog today. Will it be 30 to 40 years down the road?

Think 30-40 years ago about General Motors, United Airlines, or IBM. Who knew then they would shrink and slash pensions and possibly go into bankruptcy. That’s why the multi-employer plans are so much safer for the long run.

What do you think?

What do you think of the company’s proposal? We want to hear from you. Post a comment online for other Teamsters to read. Or send us your opinion confidentially.

UPS’s proposal will affect all Teamsters. Have your say.

May 9, 2007: See what UPS workers say they want out of contract negotiations.

No Early Contract Unless Our Issues Are Addressed
“UPS made $4 billion last year. They are getting fatter while we get the shaft. The Teamsters need to take a stand and look out for our future. That means us. The union isn’t the executive board. We are the union—the rank and file. Without us, there is no Teamsters. We have the power of the vote. We shouldn’t ratify an early contract unless we’re taken care of.”

Jairo Reyes
Local 804, New York
Package Car Driver

Real Protection from Excessive Overtime
“The 9.5 language we have now doesn’t have the substance or the teeth we need. The same with the 8 hour request: a member requests an 8-hour day for some important reason, and the company works him 10 hours. What’s the penalty? Nothing. If a member grieves excessive overtime, the company will back off for awhile, but that’s about it. We need hard and fast language that is enforceable to let members limit unwanted, excessive overtime.”

Howard Williamson
Local 162, Portland, Ore.
Package Car Driver

More Full-Time Jobs; Rights for Combo Workers
“The company is trying to make Article 22.3 jobs as unattractive as possible to try to make us feel like second-class citizens. We need to increase the rate of pay and strengthen seniority and bidding rights. A full-time job is a full-time job and we need to win 10,000 more of these in this contract. But there needs to be reform and strong universal rules that govern these jobs and protect our rights as Teamsters.”

Rich Olson
Local 90, Des Moines, Iowa
Combo Worker

Raise Part-Time Wages; Stop Supervisors Working
“The starting rate has to go up. $8.50 an hour doesn’t cut it. We work hard and deserve real union wages. Supervisors working is out of control. When a supervisor tells me as a steward ‘Go ahead file your grievance, we’ll just pay,’ then you know we’ve got a serious problem. We need stiffer language, stronger penalties and tough enforcement by our union across the board. Right now, it’s just a joke.”

Lawrence Cruz
Local 396, Los Angeles
Combo Worker