Central States Pension Deal a Financial Win for UPS

Hoffa’s Surrender on Central States Tied to UPS Freight Deal

While many details remain unknown, Make UPS Deliver has uncovered an early outline of the proposed Central States pension deal.

Under the tentative agreement, UPS will split 44,000 Teamsters out of the Central States Pension Fund and establish a new joint UPS-Teamster fund that will provide smaller pension improvements than most Teamsters expected.

UPS’s pension grab will allow the company to save billions of dollars in reduced benefit costs. Our negotiators reportedly agreed to the historic giveback on pensions as part of a deal to win a “card-check” agreement that will make it easier to organize UPS Freight terminals nationally. New Fund Would Pay Modest Benefits

Under the tentative agreement, a new fund covering UPS Teamsters in the Central States will reportedly:

  • ♦ Pay 25&Out benefits of $2,500/month
  • ♦ Pay 30&Out benefits of $3,000
  • ♦ Eliminate the penalty for retiring before 62


If approved, the tentative agreement would restore benefits to the pre-2003 cut levels. These are the same benefit levels that UPS proposed in its first pension proposal.

This benefit package represents an improvement, but is much lower than many Teamsters expected—especially given all of the hype about early bargaining strengthening our pensions.

Under the early deal, pension benefits for the 44,000 Teamsters in the Central States will still trail behind benefit levels for nearly all other Teamsters at UPS. Most UPS Teamsters enjoy 30&Out benefits of $3,500 or higher under traditional Teamster benefit plans.

Pension Deal Will Save UPS Billions, Decrease Union Power

The tentative agreement would allow UPS to achieve its long-time goal of gaining more control over Teamster benefits.

By law, UPS will be required to make a one-time $6.1 billion payment to the Central States Pension Fund to cover its withdrawal liability. (Just think of the contract improvements that could have been funded by that $6 billion plus instead!)

Industry and pension experts report that UPS’s Central States pullout will save the company $6 billion and more in reduced benefit costs but will weaken our union’s power with management.

That is why our union has always united against UPS pension grabs in the past. In 1997, Teamsters united to defeat a pension takeover by UPS and won record benefit increases.

Card-Check at UPS Freight Contingent on Pension Deal

Experts speculated that President Hoffa went along with UPS’s pension grab as part of a deal to get UPS management to cooperate with Teamster plans to organize UPS Freight workers.

Robert Bruno, a professor at the University of Illinois Institute for Labor and Industrial Relations, told the press that, “The contract language permitting UPS to leave the Central States Fund represents a sea change in the bargaining history of the Teamsters. Bruno said the terms must be significant for the union to have changed its position on this critical pension issue.” (Source: BNA Daily Labor Report)

These suspicions were confirmed in a conference call with Teamster officials on Oct. 2. Hoffa and Hall announced that management has agreed to a card check agreement so that our union can organize UPS Freight terminals—but revealed that this agreement only takes effect after the proposed national tentative agreement at UPS is ratified.

The “card check” agreement will allow Teamster locals to win bargaining rights at a UPS Freight terminal without an NLRB election—just by signing up a majority of employees on union cards and having these signatures verified by an independent arbitrator. This is a positive step for our union toward the goal of organizing UPS Freight company-wide.

But Hoffa and Hall announced they had won this card-check agreement with UPS Freight more than a year ago at the 2006 Teamster Convention. They never mentioned that they were going to let UPS split 44,000 Teamsters out of the Central States Fund as part of the deal.

We Deserve Pension Gains Without Mortgaging Our Future

UPS’s pension grab will save the company billions and weaken our union—in exchange for weak, short-term improvements. 

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 without giving in to UPS’s pension grab.

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3 Responses to Central States Pension Deal a Financial Win for UPS

  1. Ken Clark says:

    The Pension reform act of 2006.. goes into effect Jan 1 2008.. go to http://www.dol.gov... and click on highlight…'The Pension Reform Act of 2006'
    The new law forces participants of multiemployer funds (and some other pension funds) to satisfy much higher funding levels.. It has language to if necesssary take monies from upper management salaries and bonuses to satisify the shortfalls. The Central states fund is in bad shape but it will get fixed or UPS will be forced to close its doors,, I think UPS has the mulla to satisfy all funding requirements with out even blinking. IF YOU STAND STRONG AND DONT FALL FOR THE TEASER.. your and all our pension funds will be built back up and maintained.. The new Law also gives us the consumer a much more informed and current look at the funds and there status.
    The law allows for a 15-20 year transition to get the funds in shape.. but only on existing funds..
    All new Pension funds after Jan 1 2008 have to follow the new funding rules from day one.

  2. BrownClown says:

    We still have a traiter among us here at Local 804. The scumbag from the mechanics union that agreed with UPS to cut our pension by 30% is still there; then ups was able to use that as a bargaining chip. No mattter what our pension ever becomes they could always change it by asking the traiter scumbag from the mechanics union to agree with them to take money back. It happenened once, it will happen again.

  3. Ointment Please! says:

    THIS CONTRACT FOR 2008 SUCKS! VOTE NO!

    I've been with UPS for 13 years Part-Time by choice. I enjoy working Part-Time and getting Full-Time Benifits. Here in the West Region I can get the same Retirement as what UPS is offering its Full-Time Employees in the Central States. I Think all Full and Part time people should vote to join the Western Conference Pension. I understand Part timers don't even get a pension back East that SUCKS! We had a Driver Full-Time Driver Retire and he gets $3,800 month for 32 years of Service. Part-time here I've workded 13 years and I would get $1,300 mo. So by the time I put in 30 years I would get $3,000 month. I Drive Sat Air and average about 30hrs a week. They put $5.72 hour for every hour I work. The rest of the US should get the same. All Part Timers should VOTE NO!I think they should make vacation pay 25hrs or 30hrs pay if you work more than 20hrs a week. Also what about an extra vacation between the 10th year and the 20th year. Should get extra vacation at 15 years. I don't think the Western Region should Vote on the Central States Pension for them. Should be Seprate. I say Join the Western Conference Pension. Teamster Brother in OREGON

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