July 12, 2007: In June ABF CEO Bob Davidson circulated a letter to all Teamster employees saying that members should dump their Teamster pensions for a company 401(k).

The letter is supposed to be a sales job for the company’s effort to break out of our Teamster pension plans. Instead, it reveals that it would be a disaster for our union to let employers like ABF and UPS to take this course.

An 18-year Teamster wrote Davidson about the company’s proposal. And the CEO’s advice is telling. Don’t worry about losing your pension, Davidson says. Under ABF’s proposal, you would still get your 18-year pension from the Teamster fund—plus start building a 401(k) on top of that pension. It’s “not like Social Security,” Davidson writes, but your very own account.

What Davidson failed to mention is that with 18 years in a pension fund you don’t qualify for anything but a vested pension, which in most Teamster plans amounts to very little.

ABF’s pitch boils down to this: put your future in the hands of the company’s 401(k) and pray that the stock market goes way up. It might work. Then again, the lottery might work, too. You just have to pick that lucky number.

UPS Pullout Could Cause Fund’s Collapse

At least ABF management is up front about their goal: saving the company money on retirement costs. And Davidson is honest enough also to admit what would happen to Teamster pension funds if UPS and ABF pull out.

“A UPS withdrawal, or other adverse factors, would make them even less stable or cause their complete collapse,” Davidson wrote.

Our union needs to say one short word to these corporate schemes: No. The American people have said No to privatizing social security, and we need to tell UPS and ABF the same now, in a strong and unified voice.

The corporate answer is to destroy our Teamster funds to save management money on retirement costs. The union answer is to protect our retirement security by sticking together, strengthening our union funds, and winning benefit improvements.

UPS-Only Plans Cut Benefits

UPS management is pushing their own pension scheme which starts with busting 42,000 UPS Teamsters out of the Central States Fund. Management wants to establish a new UPS-only fund, with half corporate directors and half Teamster officials on the board.

UPS Teamsters don’t have to guess how a UPS-only plan would work. Two large funds exactly like this already exist. They cover all the full-time UPS Teamsters in New Jersey and the New York City areas. Both funds are housed right inside UPS headquarters in Atlanta.

UPS has a track record at these funds—and it should raise alarm for Teamsters concerned about our retirement security.

Management recently demanded big pension cuts in both. They got their way in New York, and slashed pension accrual rates by 30 percent. In New Jersey the union blocked the cuts, so management has pushed the issue before an arbitrator.

The New Jersey fund is only 52 percent funded, by the way. That’s less than Central States. The return on investment in the New York fund was just 3 percent over the past five years and just over 6 percent for the last ten years. That’s much worse than Central States.

These are UPS-Teamster plans just like the company wants to set up for 42,000 Teamsters in the Central States. And they are cutting benefits. This puts the lie to the company’s claim that you would be better off in a UPS-only plan.
Promises are cheap. The results speak for themselves.

The Positive Alternative

Hoffa’s “Best Contract Ever” and the post 9-11 stock market dip delivered pension cuts. But the recent bull stock market has boosted our pension plans and positioned us to win realistic benefit improvements. That should be the priority for this bargaining round at UPS and in freight.

Affordable retiree healthcare. We have an additional 70 cents per hour in benefits due on August 1 in our national contracts. Early bargaining at UPS can let us get a lot more, enough to pay for retiree health care at affordable cost.

A written timetable for improvements in all pension plans. We need a guarantee, in writing, so all Teamsters will know that our pensions will be restored and improved as increased contributions build up in the funds. In 1997, UPS Teamsters got a binding document from Central States before we voted on the contract. We should settle for no less.

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. This will improve pensions for both part-timers and full-timers and be a big boost to the Central States and other funds, bringing in thousands of new participants.

These are realistic goals. There is no reason to give UPS an early deal without them.

June 26, 2007: Logistics Management says there is good news for shippers in our union's current round of bargaining with UPS, and in the upcoming NMFA negotiations. "There is scant chance of a national strike as happened 10 years ago when Teamsters walked out against UPS and when they struck the LTL sector in 1994."

The article notes that Ken Hall is "seriously considering" UPS management's proposal to split up the Central States Pension. "That’s a far cry from the union’s stance in 1997 when UPS offered basically the same deal, and it resulted in a 15-day national work stoppage. But that was when Ron Carey was running the 1.3 million-member Teamsters now run by James P. Hoffa. The union has never had a national strike in transportation under the younger Hoffa."

Click here to read the full story at the Logistics Management website.

June 20, 2007: Do Hoffa and Hall still believe in the principle that powered our 1997 strike victory?

When we drew the line at UPS in 1997, we did more than win a strong contract. We won a stronger future at UPS. Now that legacy is in jeopardy.

In 1997, Teamster unity forced the company to create 10,000 new full-time jobs—by combining 20,000 part-time jobs. Still smarting from the 1997 strike, UPS management agreed to combine another 20,000 part-time jobs in 2002.

If we had not taken our strong stand in 1997, today there would be 40,000 more part-time jobs at UPS and 20,000 fewer full-time jobs. Think about that. 40,000 more throwaway jobs. 20,000 fewer full-time opportunities. Weaker union pension funds. And greatly diminished union power.

That’s why management tries to make combo jobs as unattractive as possible and tries to make combo workers feel like second-class citizens. Management wants to turn back the clock on full-time job creation at UPS. We can’t let that happen.

We need to recapture the spirit of 1997 and fight for quality, full-time jobs at UPS—the world’s most profitable transportation company.

Management should not get an early deal unless the contract:

• Creates a minimum of 10,000 full-time jobs by combining 20,000 part-time positions. A higher goal of 15,000 is within reach.
• Improves combo jobs by increasing the rate of pay and strengthening seniority and bidding rights. There needs to be strong, universal rules that protect the union rights of combo workers.

The Hoffa administration has been conspicuously silent on these issues. UPS Teamsters need to make sure our union leadership does not settle short.

This is about more than protecting the legacy of our 1997 strike victory. It’s about protecting our future. We can’t let UPS turn into a company where the vast majority of employees work in part-time, throwaway jobs.

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.