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Is Central States pension fund ready to go under?
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<blockquote data-quote="JonFrum" data-source="post: 183930"><p>TDU has redesigned its website and has a number of new informative articles. This one . . .</p><p><a href="http://www.tdu.org/node/972" target="_blank">Central States Fund Expands to $21 Billion | Teamsters for a Democratic Union</a></p><p>on the financial state of Central States says, in part, </p><p>"In December, the fund informed all Locals that all new contracts negotiated must contain eight percent annual increases in pension contributions, or those members will be kicked out of fund participation. </p><p>This mean that in the UPS contract there must be pension contributions of at least 40¢ per hour the first year, then 50¢, and then 60¢ by the fifth year if the contract is that long. These are minimums required to stay in the fund, not to restore benefit cuts."</p><p></p><p>NOSPINZONE, my understanding is Withdrawal Liability will be owed to the Fund, ( and to all the other funds, except the Western Conference fund) the minute UPS stops contributing to the Fund. Period. It's automatic. And a change in Exclusive Bargaining Agent from the IBT to the APWA would trigger it. As the above quote seems to say, even if the Teamsters remain Exclusive Bargaining Agent, UPS must increase its future contributions by 8% or it will be thrown out of the Fund by the Trustees and Withdrawal Liability will be triggered. Withdrawal Liability is owed to the Fund, not to the IBT, or to the individual participants. That's why I don't understand what you are saying when you seem to imply that Withdrawal Liability is not necessarily due, and that Judge Moran has something to do with it. He is only a judge. A judge can't compel UPS to stay in a fund against its will, nor can a judge issue orders that contradict The Law. But since I haven't seen Judge Moran's memorandum and order of November 17, 2003, you'll have to post a link to it so I can look it over. </p><p></p><p>This is a problem I'm having repeatedly with APWA supporters: they keep referencing documents that I haven't seen. I called on the APWA months ago to publish online all of its documents but it never did. I asked for the bylaws, detailed contract proposals, and pension and H&W plan descriptions, and so on. Early on, I signed up for information and a newsletter on the APWA website but I never got any information, just a monthly one page email "newsletter" from Danny Eason that had very little useful content. The APWA website hasn't been updated or expanded much so it's difficult to know what the APWA's positions and intentions really are. It's impractical, and should be unnecessary of me, to generate a thousand email inquiries to Van or Danny asking for rulings on each of the hundreds of paragraphs in a typical collective bargaining agreement, pension plan, health and welfare plan, card check campaign, NLRB election, etc. Why should I, and everyone else, have to pull teeth to get this information when it should be freely available on the website. </p><p>- - - - -</p><p>Originally, in connection with the UPS proposal to take over our pensions in 1997, TIEGUY was saying single-employer pension plans were superior to multi-employer plans in part because the PBGC insures their benefits to a higher level, almost four times as high. I pointed out that we shouldn't be focused on PBGC insurance as a selling point, because the only time it comes into play is if the plan fails, and you are in dire straights. One would not plan on such a disaster, so the level of insurance coverage should be way down on one's list of things to consider. Besides the PBGC Single-Employer Insurance Plan is itself all but bankrupt, and will only get worse by the time you actually need it in the future. </p><p></p><p>Now we see that the Single-Employer coverage is dramatically reduced for anyone retireing before age 65. Ironically, Central Staters (rightly) complain that they are being made to deliver packages until age 65, yet the "selling point" of $4,125 coverage only applies if you do, in fact, wait until age 65 to start collecting benefit checks. The coverage is not only reduced if the surviving spouse option is selected, but is also reduced because some types of benefits are not covered, especially recent plan improvements. Coverage is zero for the first five years, but even after that it is only the actual payouts that are covered, not the plan's assets. So in effect, you don't have any coverage at all until you actually start receiving benefit checks. And for almost everyone, the covered amount will be significantly lower than the frequently cited $4,125.</p><p></p><p>APWA should run the numbers and generate a chart of the likely coverage that would be provided to people of various ages, under various conditions. The amounts might be only twice the Multi-Employer levels, or there abouts. But remember, Single-Employer plans have a documented history of failing at a rate of 100 times that of Multi-Employer plans. (That's why Congress sets their premimums and coverage levels higher, to make them artificially appear safe.) So the Single-Employer plans have a somewhat better nominal level of coverage, but they are a great deal worse if you consider that the coverage is a hundred times more likely to be needed, and when it is, the PBGC may go belly-up anyway.</p><p></p><p>I know it's hard to think of a UPSers-only fund as failing. UPS doesn't seem to be on the verge of bankruptcy. But history is full of examples of successful companies that were doing fine one day, then were bankrupt ten years later. UPS, is heavily dependent on oil for its ground and air operations. It's dependent on its airline at a time when the oil and airline industries are vunerable to terrorism and it's financial effects. (Didn't the Twin Towers actually fall on a UPS facility?) UPS is cutting and squeezing to meet the competition. It's implementation of PAS is shocking. It has just experienced several of the mildest winters in recorded history; things will likely only get worse in future winters. Remember OPL; and that plan to not deliver packages to out-of-the-way stops, because they were, well, out-of-the-way? Remember the plan to install seats in the planes on weekends and rent them out for charters, then rip the seats out for the workweek? Notice how they treat their people --- labor and management. Notice how the competion is expanding? How UPS won't wash its package cars (traveling billboards for the company), but will spent millions on TV ads and slogans, and sponsorship of autoracing that glorifies reckless driving, neither of which gets a single package delivered. Then their is the pitiful part-time wage situation and the high turnover problems it causes. And The Market's evaluation of the company as expressed in its languishing stock price. I could go on. The point is you can't be too sure UPS will be around for the next 100 years. For that matter, UPS is 100 years old, but only in a technical sense. The first half century or so really shouldn't count for most purposes. </p><p></p><p>Questions: </p><p>If the APWA is certified as our exclusive bargaining agent at the same moment the Contract expires, July 31, 2008, will we be "at will" employees without a contract for months until a new one is subsequently negotiated and approved?</p><p></p><p>If the APWA is certified months earlier than 7/31/08, what happens to the existing contract? It would have several months to run but since it is a contract between UPS and the Teamsters, and the Teamsters would now be out of the picture, would the contract be null and void? I find it hard to imagine that the contract could remain in force since it is filled with references to the Teamsters, such as to Teamster pension and H&W plans, Teamster grievance panels, Teamster seniority, etc.</p><p></p><p>APWA and its supporters repeatedly claim the Teamsters are diverting (stealing?) 60% of the money UPS contributes on our behalf to the various pension plans and using it to subsidize the retirement of non-UPSers. Yet no one has ever responded to my request for proof that this looting is taking place. All I ever see is endless repetition of the charge as if it is self-evident. Take Central States: If you also claim that 25 or 30% or so of plan assets were lost by mismanaged investments, then shouldn't you subtract the investment losses from the 60% figure? If money was lost in the stock market, it's gone. How can it be used by the Teamsters, (more acurately, by the Teamsters/Management Joint Board of Trustees) to subsidize the retirement of non-UPSers? I maintain this observation alone cuts your 60% subsidy figure about in half, and my earlier observations that the retirement benefits of non-UPSer retirees are largely paid for by their one, or more, employer's many years of contributions, reduces it a lot further.</p><p></p><p>If someone is just short of 5-year Vesting in a Teamsters-sponsored plan and is voluntarily or forceably transfered to an APWA pension fund, will they not need nearly ten years to get Vested (almost five years in the old plan, plus, starting from scratch, five years in the new plan)? </p><p></p><p>Whew. You guys are wearin' me out.</p></blockquote><p></p>
[QUOTE="JonFrum, post: 183930"] TDU has redesigned its website and has a number of new informative articles. This one . . . [url=http://www.tdu.org/node/972]Central States Fund Expands to $21 Billion | Teamsters for a Democratic Union[/url] on the financial state of Central States says, in part, "In December, the fund informed all Locals that all new contracts negotiated must contain eight percent annual increases in pension contributions, or those members will be kicked out of fund participation. This mean that in the UPS contract there must be pension contributions of at least 40¢ per hour the first year, then 50¢, and then 60¢ by the fifth year if the contract is that long. These are minimums required to stay in the fund, not to restore benefit cuts." NOSPINZONE, my understanding is Withdrawal Liability will be owed to the Fund, ( and to all the other funds, except the Western Conference fund) the minute UPS stops contributing to the Fund. Period. It's automatic. And a change in Exclusive Bargaining Agent from the IBT to the APWA would trigger it. As the above quote seems to say, even if the Teamsters remain Exclusive Bargaining Agent, UPS must increase its future contributions by 8% or it will be thrown out of the Fund by the Trustees and Withdrawal Liability will be triggered. Withdrawal Liability is owed to the Fund, not to the IBT, or to the individual participants. That's why I don't understand what you are saying when you seem to imply that Withdrawal Liability is not necessarily due, and that Judge Moran has something to do with it. He is only a judge. A judge can't compel UPS to stay in a fund against its will, nor can a judge issue orders that contradict The Law. But since I haven't seen Judge Moran's memorandum and order of November 17, 2003, you'll have to post a link to it so I can look it over. This is a problem I'm having repeatedly with APWA supporters: they keep referencing documents that I haven't seen. I called on the APWA months ago to publish online all of its documents but it never did. I asked for the bylaws, detailed contract proposals, and pension and H&W plan descriptions, and so on. Early on, I signed up for information and a newsletter on the APWA website but I never got any information, just a monthly one page email "newsletter" from Danny Eason that had very little useful content. The APWA website hasn't been updated or expanded much so it's difficult to know what the APWA's positions and intentions really are. It's impractical, and should be unnecessary of me, to generate a thousand email inquiries to Van or Danny asking for rulings on each of the hundreds of paragraphs in a typical collective bargaining agreement, pension plan, health and welfare plan, card check campaign, NLRB election, etc. Why should I, and everyone else, have to pull teeth to get this information when it should be freely available on the website. - - - - - Originally, in connection with the UPS proposal to take over our pensions in 1997, TIEGUY was saying single-employer pension plans were superior to multi-employer plans in part because the PBGC insures their benefits to a higher level, almost four times as high. I pointed out that we shouldn't be focused on PBGC insurance as a selling point, because the only time it comes into play is if the plan fails, and you are in dire straights. One would not plan on such a disaster, so the level of insurance coverage should be way down on one's list of things to consider. Besides the PBGC Single-Employer Insurance Plan is itself all but bankrupt, and will only get worse by the time you actually need it in the future. Now we see that the Single-Employer coverage is dramatically reduced for anyone retireing before age 65. Ironically, Central Staters (rightly) complain that they are being made to deliver packages until age 65, yet the "selling point" of $4,125 coverage only applies if you do, in fact, wait until age 65 to start collecting benefit checks. The coverage is not only reduced if the surviving spouse option is selected, but is also reduced because some types of benefits are not covered, especially recent plan improvements. Coverage is zero for the first five years, but even after that it is only the actual payouts that are covered, not the plan's assets. So in effect, you don't have any coverage at all until you actually start receiving benefit checks. And for almost everyone, the covered amount will be significantly lower than the frequently cited $4,125. APWA should run the numbers and generate a chart of the likely coverage that would be provided to people of various ages, under various conditions. The amounts might be only twice the Multi-Employer levels, or there abouts. But remember, Single-Employer plans have a documented history of failing at a rate of 100 times that of Multi-Employer plans. (That's why Congress sets their premimums and coverage levels higher, to make them artificially appear safe.) So the Single-Employer plans have a somewhat better nominal level of coverage, but they are a great deal worse if you consider that the coverage is a hundred times more likely to be needed, and when it is, the PBGC may go belly-up anyway. I know it's hard to think of a UPSers-only fund as failing. UPS doesn't seem to be on the verge of bankruptcy. But history is full of examples of successful companies that were doing fine one day, then were bankrupt ten years later. UPS, is heavily dependent on oil for its ground and air operations. It's dependent on its airline at a time when the oil and airline industries are vunerable to terrorism and it's financial effects. (Didn't the Twin Towers actually fall on a UPS facility?) UPS is cutting and squeezing to meet the competition. It's implementation of PAS is shocking. It has just experienced several of the mildest winters in recorded history; things will likely only get worse in future winters. Remember OPL; and that plan to not deliver packages to out-of-the-way stops, because they were, well, out-of-the-way? Remember the plan to install seats in the planes on weekends and rent them out for charters, then rip the seats out for the workweek? Notice how they treat their people --- labor and management. Notice how the competion is expanding? How UPS won't wash its package cars (traveling billboards for the company), but will spent millions on TV ads and slogans, and sponsorship of autoracing that glorifies reckless driving, neither of which gets a single package delivered. Then their is the pitiful part-time wage situation and the high turnover problems it causes. And The Market's evaluation of the company as expressed in its languishing stock price. I could go on. The point is you can't be too sure UPS will be around for the next 100 years. For that matter, UPS is 100 years old, but only in a technical sense. The first half century or so really shouldn't count for most purposes. Questions: If the APWA is certified as our exclusive bargaining agent at the same moment the Contract expires, July 31, 2008, will we be "at will" employees without a contract for months until a new one is subsequently negotiated and approved? If the APWA is certified months earlier than 7/31/08, what happens to the existing contract? It would have several months to run but since it is a contract between UPS and the Teamsters, and the Teamsters would now be out of the picture, would the contract be null and void? I find it hard to imagine that the contract could remain in force since it is filled with references to the Teamsters, such as to Teamster pension and H&W plans, Teamster grievance panels, Teamster seniority, etc. APWA and its supporters repeatedly claim the Teamsters are diverting (stealing?) 60% of the money UPS contributes on our behalf to the various pension plans and using it to subsidize the retirement of non-UPSers. Yet no one has ever responded to my request for proof that this looting is taking place. All I ever see is endless repetition of the charge as if it is self-evident. Take Central States: If you also claim that 25 or 30% or so of plan assets were lost by mismanaged investments, then shouldn't you subtract the investment losses from the 60% figure? If money was lost in the stock market, it's gone. How can it be used by the Teamsters, (more acurately, by the Teamsters/Management Joint Board of Trustees) to subsidize the retirement of non-UPSers? I maintain this observation alone cuts your 60% subsidy figure about in half, and my earlier observations that the retirement benefits of non-UPSer retirees are largely paid for by their one, or more, employer's many years of contributions, reduces it a lot further. If someone is just short of 5-year Vesting in a Teamsters-sponsored plan and is voluntarily or forceably transfered to an APWA pension fund, will they not need nearly ten years to get Vested (almost five years in the old plan, plus, starting from scratch, five years in the new plan)? Whew. You guys are wearin' me out. [/QUOTE]
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