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PENSION PROTECTION
PENSION PLANS PENSION FACTS SERVICES |
Late on September 30, the International Brotherhood of Teamsters and UPS announced that they had reached a tentative, groundbreaking 5-year contract agreement. Union members will vote by mail by early December whether to approve the plan. Pensions were a critical issue in the negotiation. Some observers view the deal as setting a critical precedent for multi-employer pension plans, potentially allowing a participating company to regain control of its employees’ pensions from union pension management, in exchange for substantial cash infusions and a promise to fund their pensions fully in the future. Under the agreement, UPS would reportedly make a $6.1 billion one-time payment to the Central States pension fund, and would then withdraw from it. UPS workers would move into a single employer pension plan, that UPS would fully fund. According to one Teamsters official, union members’ pay and benefits would increase by $9 hourly over the length of the contract. Pay increases reportedly would not begin until summer 2008. * * * In the wee hours of Saturday, September 8, a Mexican truck carrying 200,000 tons of steel bound for North Carolina crossed into the U.S. at Laredo, Texas. Thus began a controversial, year-long trial program satisfying the North American Free Trade Agreement. Mexican truckers in the U.S. will be bound by the same rule as other truckers here, limited to 11 hours of driving followed by 10 hours of rest.
The Senate was expected to vote on a proposal to block funds for the program, from North Dakota Senator Byron Dorgan. Said Teamsters General President Jim Hoffa, “I don’t see how any patriotic American could vote to allow these dangerous trucks to cross our borders and travel freely throughout our country. We don’t know who’s driving these trucks and we don’t know what they’re carrying.” * * * According to press reports, the International Brotherhood of Teamsters has reached a tentative agreement that would allow UPS to withdraw from the Teamsters Central States Pension Fund. UPS is the largest contributor to the multiemployer fund. Any such agreement would need to be ratified by the plan’s individual members before such a withdrawal could proceed. The Teamsters Central States plan is one of 20 pension plans covering UPS employees. As the nation prepares for the 2008 Presidential elections, International Brotherhood of Teamsters President James P. Hoffa renewed his call for national health care this month. “Without question, a national health care system is the most sensible plan for individuals and businesses,” Hoffa said in an article in the Detroit News. “Some argue that such a system would be unrealistic, but nothing is realistic about maintaining our current system.” * * * According to a new report published by Raymond James & Associates, "Teamsters Multiemployer Pensions: Needed Change May Finally Be on the Way," By William H. Fisher, Raymond James & Associates, June 8, 2007, the Central States Pension Fund is badly underfunded and UPS should seek to negotiate a way to opt its employees into a different pension plan for its employees. Approximately sixty cents of every dollar UPS contributes to the plan pays to cover the retirement costs of employees of other companies. Click Here: Needed Change May Finally Be on the Way * * * Reports coming Teamster negotiations with United Parcel Service describe a proposal to establish a new, joint pension plan for UPS employees run by an equal number of company and union trustees. UPS also proposed an increase in pension contributions for other pension plans covering its Teamster employees, according to a statement by the union. Meanwhile, Gary, Indiana-based trucking company Enterprise Trucking is being sued by Teamsters Local 142 for not making $7,500 in pension contributions for union members. * * * New York City Mayor Michael Bloomberg proposed on April 23 to charge trucks $21 to enter Manhattan below 86th Street on weekdays. Cars would pay $8 under the proposal. The East and West side thruways would remain free, and current tolls for bridges and tunnels would be subtracted from the fee. Truckers joined demonstrations in Washington, DC and several state capitals April 23-25, as part of The Great American Truck Out. Some 75 truckers and supporters rallied on the capital steps in Oklahoma City, and truck convoys were planned to slow traffic on the Beltway around Washington, DC. The demonstration will target the U.S. Department of Transportation’s 1-year pilot program to allow registered Mexican truck drivers to deliver their cargo to U.S. destinations. * * * The Association of Parcel Workers of America kicked off a campaign to replace the Teamsters as the union organizing 238,000 UPS employees. The APWA (http://www.parcelworkers.com) will need at least 30,000 signatures before it can request an election. Should it succeed, it would gain control of UPS employees’ share of more than $50 billion in multiemployer pension funds. “We don’t believe that the APWA is a legitimate labor union,” said a top Teamster official. “They have no filings with the Department of Labor and they have never negotiated any contracts.” Teamster leaders approved a plan by Yucaipa Companies to reorganize Allied Holdings. The plan would preserve the Teamster-negotiated contract as well as all pension, health and welfare benefits, according to union officials. Some 3,300 Teamsters work for Allied, the largest carhaul company in North America. Members still need to ratify the decision. * * * A cold spell that gripped much of the nation, and particularly the Northeastern United States, in late January and early February caused diesel and gasoline prices to rise slightly. Diesel prices had generally fallen during the past six months, following 18 months where the average price per gallon gradually rose. According to an analysis by the U.S. Department of Energy at the beginning of the year, the price of crude oil accounts for just over half of what truckers pay for at the pump. The research, called “What We Pay for in a Gallon of Diesel,” found that 52 percent of the average retail price goes to the cost of crude oil, 10 percent to taxes, 19 percent to refining costs, and 9 percent to distribution and marketing. New York Senator and Presidential hopeful Hillary Rodham Clinton met privately with the board of the 2.3 million member United Food and Commercial Workers Union on January 29. She was the first Presidential candidate to meet with the union, which represents grocery and retail workers. * * * Senator Edward M. Kennedy used his first hearing as Chairman of the Committee on Health, Education, Labor and Pensions to call for a national system of universal health care coverage. He promoted the universal healthcare plan passed in his home state of Massachusetts last year that requires coverage for all residents. Universal Health Care was number three on the list of legislative priorities for 2007 announced by the International Brotherhood of Teamsters. It followed a call for legislation favoring union organizing, “The Employee Free Choice Act” and raising the national minimum wage to $7.25 per hour. Number four on that list was Retirement Security. “We must ensure that all Americans are provided with retirement security and work to reverse the decline in defined benefit pension plans,” the Teamsters’ document said. * * * With Minnesota Congressman James Oberstar expected to become Chairman of the House Committee on Transportation and Infrastructure, observers have keenly sought indications of where he will take that committee’s business in 2007. Oberstar was a main author of the Transportation Equity Act for the 21st Century, which allocated $218 billion for work on highways, bridges, mass transit, and other projects. In what many have perceived as a strong climate favoring increased Congressional oversight, the new Chairman is widely expected to follow that trend. In one of his first statements, Oberstar called for increased highway funding, as well as for more dollars for the National Highway Traffic Safety Administration and the Federal Motor Carrier Safety Administration. * * * Teamsters President James P. Hoffa was reelected to another 5-year term by nearly a 2-1 margin. Hoffa put a strong emphasis on pension cuts during his campaign, and now with wins by the Hoffa slate and also by labor-supported Congressional Democrats, workers await news on what the winners will do to benefit their pension plans. As Congress changed hands, leadership over the House and Senate committees with jurisdiction over labor issues was turned over to Democrats George Miller and Ted Kennedy. Both are expected to focus on labor issues in the upcoming session, with increasing the federal minimum wage and altering union organizing rules being widely reported as top priorities. Meanwhile, drivers at two Delaware Fedex locations voted to join the Teamsters, in what union leaders declared as a major step to unionize the company’s workers nationwide. The company reportedly has begun to challenge the results. If the results hold, the next step will be for the new local representation to try to reach an agreement on a new contract. * * * The United States currently faces a shortage of some 20,000 long-haul truckers, according to research by the American Trucking Association. That means that the decline in trucker pay experienced over the past decade will need to be reversed to bring new drivers into the industry. An ATA spokesperson predicted in October that the shortage could reach 110,000 truckers by 2014. The Texas Workforce Commission estimated that the state would need 35,200 new truck drivers by 2012. * * * Pension cuts have been a major issue in the current election campaign for control of the International Brotherhood of Teamsters. “The Teamsters have made pension protection a priority and we are fighting tooth and nail to do just that,” said Teamsters General President James P. Hoffa. "Today we see an attack on pensions. We see rich companies trying to get rid of pensions. But that’s not going to happen to the Teamsters.” “We’ve had the largest pension cuts in history, when [Hoffa] ran on a pledge of no dues increase and ‘25 and out’ (full pensions after 25 years of work,” charged challenger Tom Leedham. Ballots were mailed to Teamster members on October 6. Meanwhile FedEx drivers in Wilmington, Delaware are scheduled to vote October 20 to authorize the Teamsters to represent them in future negotiations. None of Fedex’s 15,000 drivers nationwide are currently unionized, and union officials are watching developments in Wilmington closely because they believe it will have major implications for the future of Fedex’s workforce. * * * On Thursday, Aug. 17, President Bush signed into law the Pension Protection Act of 2006, which he called the "most sweeping reform" of US pension law since the enactment of the Employee Retirement Income Security Act (ERISA) in 1974. The compromise measure will have broad impact on the way future pension plans are structured and funded, but to a much greater degree on single employer plans than on the multiemployer plans more common in trucking and transportation. It will affect pension outcomes, not only for tens of thousands of employees whose plans are currently hanging on the contents of the bill, but for millions of Americans who do not follow pension issues closely. Affected groups everywhere are weighing in with commentary. With some 44 million Americans covered by private pension plans, bipartisan support for private sector reform was made possible by not stirring up a hornet’s nest of debate about stricter funding guidelines for public employee defined-benefit plans, which remain generous and are woefully underfunded. In any case, the bill may well signal the end of the era private defined-benefit pension plans. As recently as 25 years ago, more than 80 percent of large and medium-sized companies offered such plans. Today, fewer than a third do. * * * On August 3, the Senate approved a compromise Pension Reform Bill and sent it on to the White House. It tightens rules for employers with defined-benefit pension plans and clamps down on companies that have fallen behind in meeting their funding obligations. Underfunding of Defined Benefit plans is now estimated at $450 billion. The bill requires that companies bring their plans to 100 percent funding within seven years, although certain major airlines are given a longer period. Plans that are seriously underfunded, like many in the trucking industry, face restrictions, such as a ban on increasing benefits, and must make accelerated catch-up contributions. President Bush, who has taken a tough stance on forcing full funding of company promises, is expected to sign the legislation shortly. The Teamsters, who already represent thousands of workers at UPS nationally, won a card-check campaign in early August to organize its first UPS Freight terminal. A spokesman for UPS said the company will recognize the union and conduct negotiations in good faith. Meanwhile, on August 10 the U.S. Department of Transportation submitted for White House review a plan for the broader use of electronic on-board recorders for hours-of-service compliance. There is no deadline for completing the review. * * * Some Democratic Congressmen joined with Teamster leaders recently to criticize pending pension-reform legislation. “I think we need a discussion before we rush away from defined benefits,” said Representative Richard Neal (D-MA). “I think we are hastening to a deregulated pension system.” U.S. Senator Ted Kennedy (D-MA) reportedly supported the plan in recent Congressional negotiations. * * * Transportation has been labeled a “High Growth Industry” by the U.S. Department of Labor, which forecast the creation of over 900,000 new U.S. transportation jobs over the next 12 years. Over a third of these openings are for drivers of heavy and tractor-trailer trucks. The DOL cites new technologies that allow time-specific delivery and electronic tracking of cargo as factors driving sector growth. But the continuous rise in the cost of diesel fuel – up another 2 cents in the first week of July – spelled more bad news for independent truckers. At a national average of $2.91 per gallon, diesel prices climbed to 51 cents above their mark a year ago. * * * In April, the ATA Truck Tonnage Index increased 2.0 percent – its strongest monthly gain in over a year and first of 2006
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