What happens if the contract isn't ratified on 1/1/08 when the regs go into effect?

Discussion in 'UPS Union Issues' started by cheryl, Oct 16, 2007.

  1. cheryl

    cheryl I started this. Staff Member

    I'm confused about the deadline issue. You're saying that there is nothing to lose if the contract is voted down and misses the January deadline, when the new pension regulations go into effect, because you still have until August 1st to negotiate.

    Most of the articles that I have read in the mainstream press say that this was a joint effort between UPS and the Teamsters to come to an agreement before the new regulations take effect on January 1.

    Could someone please explain to me what the specific differences are if the contract is or isn't ratified before the new pension regulations go into effect? Please no name calling or bullying. I'm looking for information, not endorsing anything.

     
  2. blue efficacy

    blue efficacy Active Member

    Re: What happens if the contract isn't ratified on 1/1/08 when the regs go into effec

    According to TDU it isn't a big deal. But of course take that with a grain of salt, they hate the contract, but wouldn't outright lie...

    http://www.makeupsdeliver.org/news.php?extend.93
     
    Last edited: Oct 16, 2007
  3. zippo

    zippo Guest

    Re: What happens if the contract isn't ratified on 1/1/08 when the regs go into effec

    TDU (MakeUPSdeliver.org) is writing propaganda which intentionally misleads their followers by omitting certain facts related to this issue. If they aren't trying to manipulate their members why not just give the full story and let their members decide for themselves?

    The truth is that the opportunity for us to buy our way out of the Central States fund ends on January 1, 2008.

    Failure to ratify the contract by that date leaves UPS on the hook to continue paying the pensions of failed trucking companies when that money should be going to secure and improve UPSer pensions.

    This is a once in a lifetime opportunity, we failed to take care of this pension problem last time and the pension problem has swollen. Don't be so short sighted as to hold out for another 50 cents or some kind of grievance that can be addressed in the next contract or some other way.

    Vote no and this opportunity is gone forever and we have given away a piece of the UPS pie to pay for outsider's pensions. UPSers all get a smaller slice because we voted to give away part of the pie.

    from knowyourpension.org.>>>>

    What makes this set of negotiations so complicated can be covered in one word – pensions. Or, specifically, pension withdrawal liability.

    Currently, about 60 cents of every dollar that UPS contributes to pensions goes to fund pensions of retirees of other companies.

    UPS and the freight carriers belong to scores of multiemployer pension plans. Because of the decline in unionized carriers and the more than 600 closings of Teamsters-covered carriers in the freight industry since the Motor Carrier Act of 1980 deregulated trucking, the remaining carriers (namely UPS, YRC Worldwide, Arkansas Best and a handful of smaller carriers) are liable for literally billions of dollars in unfunded pension withdrawal liability.

    That’s because there are only about 155,000 active participants in the Central States plan (down from nearly 190,000 in 2001) while there are about 295,000 beneficiaries (up from 275,000 in 2001).

    “We strongly believe UPS and its employees would be far better off if it were able to exit the Central States plan,” Bill Fisher, managing director with Raymond James & Associates, wrote in a recent analysis of Teamsters multiemployer pension plans.
     
    Lasted edited by : Oct 16, 2007
  4. 1timepu

    1timepu Member

    Re: What happens if the contract isn't ratified on 1/1/08 when the regs go into effec

    I Have been saying that for years, since 97 when we went out on strike over pension control, that how the union spun it, but in fact if UPS pulls out of multi employer pension plans it is still controlled by the teamsters and UPS, Carey didnt want to leave other teamsters hangin in the air, but to me all I care about are UPS teamsters
     
  5. brown67

    brown67 Active Member

    Re: What happens if the contract isn't ratified on 1/1/08 when the regs go into effec

    Since Central States is underfunded by 52%. The fund will have to make massive cuts in benefits in order to meet its obligations. I believe they have to be 80% funded next year. To meet the 80% funding requirement passed by congress they have to reduce their obligations and that means cuts. See why all of us Central States guys want to get the hell out.
     
  6. cheryl

    cheryl I started this. Staff Member

    Re: What happens if the contract isn't ratified on 1/1/08 when the regs go into effec

    That's an interesting analysis zippo and Brown67. I'm also interested in someone stepping up to explain the other side.

    Why is it better to vote the contract proposal down and wait until the new pension regulations are in effect to vote in a contract?
     
  7. scratch

    scratch Least Best Moderator Staff Member

    Re: What happens if the contract isn't ratified on 1/1/08 when the regs go into effec

    I don't like this because this date is forcing us to take what looks like a bad deal to me. It looks to me that UPS is getting out of CS and leaving those of us with a lot of years in it to lose out in the long run. I was hoping to get out of CS completely, not get three different pension checks for working for the same company. I was also hoping that my UPS Pension for my part time years would be put in the new plan, but it is not. I will still have to wait till I'm sixty-five for that. I have been wanting out of Central States for twenty years now, but it looks like I am still stuck in it for 23 years of credit. No telling what kind of shape it will be in thirteen years from now, but I'm sure it won't be good.:mad:
     
  8. DS

    DS Fenderbender

    Re: What happens if the contract isn't ratified on 1/1/08 when the regs go into effec

    The way I see it Cheryl, everyone has to agree that getting out of that pension fund is critical for everyone.If ups decides to change thier mind about the 6.1 $billion buy out because this contract is voted down,it could be the difference between living on cat food instead of kraft dinner and instant noodles for veteran upsers in the golden years.When is the vote? Is there time to amend some of the other issues that pertain to the younger upsers?
    If UPS puts this in the laps of upsers the day before the deadline they may just have another strike on thier hands.In my eyes its a war between the veterans and the newer underpaid ups rookies.
    I'm way up here in the great white north and I may not be seeing the whole picture, but the timeline for settling this contract is critical,and the teamsters may need to request a few changes before they vote.
     
    Last edited: Oct 16, 2007
  9. hunchback

    hunchback New Member

    Re: What happens if the contract isn't ratified on 1/1/08 when the regs go into effec

    I got this off the makeupsdeliver.org. website. Hope this helps clarify. I doubt that any changes can be made unless it is voted down (just an opinion):

    Speeds Up the Vote: Less Time to Study Contract--From Brown Out to Quick Vote

    The International Union now says that the UPS contract ballots will be mailed "by October 26", instead of November 5. They will be counted on November 16.

    This ten-day speed-up gives UPS Teamsters less time to review and discuss the proposed contract . Many local unions have not even scheduled contract review meetings.

    It’s up to active Teamsters to get the word out, distribute Make UPS Deliver leaflets, talk with fellow Teamsters, and encourage all UPSers—full-time and part-time—to study the contract and cast an informed vote.
     
  10. Cezanne

    Cezanne New Member

    Re: What happens if the contract isn't ratified on 1/1/08 when the regs go into effec

    I would get it from the source. It is a long and difficult read but download the new pension reform act of 2006, the provisions for penalties of underfunded pension plans will start taking effect in January "08". From my limited understanding both the company and the union are trying to rush this contract through in order to avoid these additional charges. I believe that those penalties will go strictly to Uncle Sam and will not help relieve any of the underfunding, also if the plan is below the required vesting ratio the trustees will have to provide additional funding or cut benefits again.
     
  11. chevyman

    chevyman Member

    Re: What happens if the contract isn't ratified on 1/1/08 when the regs go into effec

    Under the new contract if it passes you won't get your check from CS, you will get it from the new UPS plan. Your part-time time, your CS years, and time under the new contract will be in one check under the new plan. Hey, in my book it is all about the pension. Do you want an unsecure plan 47% funded or one 100% funded. You aren't leaving those CS members hanging, UPS will be putting 6 billion in the fund to shore it up. It is a win-win for you, CS, and UPS. THINK ABOUT IT. If you quit today and start somewhere else tomorrow you are not going to start out at 28$ @ hour with benefits, a pension, and 401k. It ain't happening. Yeah there be somethings about the contract that stink. Split raises, etc... It may take a new guy longer to get to top wage, but he will get there. Not at GM, a new hire there working next to a 25 year person will never make what the 25 year guy makes because that is what their union agreed on. Vote how you feel in your heart and not your pocket book.
     
  12. JustTired

    JustTired free at last.......

    Re: What happens if the contract isn't ratified on 1/1/08 when the regs go into effec

    I don't understand why the CS pension has to be part of the regular negotiations.
    Seems to me that it would be better if it wasn't. For one thing, if it was separate, you would only need the vote of those affected by this decision. That vote would be pretty much a no-brainer.

    Once again, those of us in the CS are going to be affected by the vote of the entire country. The majority of which aren't in the CS.

    Tying the future retirement of all CS UPSers to the volatile issues of wages and working conditions nationwide, is just downright wrong.

    No matter what you think of the tenative agreement, if it is voted down, 40+ thousand UPSers future retirement is going to go down with it.

    And, in my opinion, that isn't fair to those in the CS. And it isn't fair to those that aren't.
     
  13. KTB

    KTB New Member

    Re: What happens if the contract isn't ratified on 1/1/08 when the regs go into effec

    Doesn't UPS want out of the Central States plan? If this contract gets voted down I'm sure UPS will still want out. They've made no secret that they want out for the past 10 years. UPS gets what it wants with the buy-out. They also get the buy-out essentially for free since they will more than make up the buy out costs at the expense of everyone's wages and health bennies for new hires.

    If the contract gets voted down they have to go back to negotiations and find another way to make central states work. If things drag in to April or May (?) UPS and the Teamsters will have to pay a fine. Neither party wants that.
     
  14. browned_out

    browned_out Member

    Re: What happens if the contract isn't ratified on 1/1/08 when the regs go into effec

    I agree, I'm in the Western Conf and I don't want to vote on CS. However the company is going to make all UPSers pay for that 6.1 billion, in the form of split wages, 3 year prog, 8.50 wage freeze, etc. What a crock of ****, I hope all you people who voted for Hoffa are satisfied, this guy is a piece of ****.
     
  15. hangin455

    hangin455 Member

    Re: What happens if the contract isn't ratified on 1/1/08 when the regs go into effec

    On Jan 1 Federal law forces all pension funds to be 90% funded or start cutting benefits. There will be no other opportunity to "make Central States work".
     
  16. Channahon

    Channahon New Member

    Re: What happens if the contract isn't ratified on 1/1/08 when the regs go into effec

    Sometimes independent information really provides some insight to what is going on with this contract.


    A Fund Farewell; Federal pension law gave one push, say some, for UPS and Teamsters to reach early agreement
    Traffic World, October 15, 2007 Monday

    BYLINE: MICHAEL FABEY

    Few events in transportation these days truly reach the level of unique, but the tentative agreement between the Teamsters and UPS for company parcel workers appears to make that mark.

    For starters, the tentative pact comes a year early, a first for an agreement of this magnitude between the global shipping giant and the union.

    A decade ago, an impasse between the two resulted in a brutal strike that marred relations and cost the company dearly, in terms of customers and revenue.

    Then there's the acknowledged key sticking and bargaining point for the two sides - a troubled pension fund.

    In 1997, the Teamsters rallied around a cry to keep pensions untouched and intact. This year, negotiators stitched an agreement that allows UPS to pull out of Central States Pension Plan, the biggest shared by the company and the union, for a lump-sum payment of $6.1 billion.

    "We will sever once and for all our ties to Central States in terms of financial obligations," said UPS spokesman Norman Black.

    "I've not seen one like this before," said Jeffrey Sparling, director of advice for multiemployer pension funds for SEI, a financial services firm which manages $199 billion in assets for 490 clients, including multiemployer plans.

    Usually, companies pull out and pay withdrawal fees over a longer haul. "They're shoring up the program in a short time," Sparling said. "That's pretty big."

    The key event in the past decade that changed the calculation may have been the Pension Protection Act of 2006. Before that law, a troubled pension fund such as Central States could simply muddle along each year, possibly jeopardizing workers' retirement nest eggs.

    The pension plan itself was well funded in 2000. But, like many other funds, Central States took a major hit with the stock market divee and other bumps through the early part of the decade.

    In 2005, the last official year for which the data is officially available, the fund reported assets of $18.7 billion and liabilities of $39.6 billion. Fund officials this summer reported assets had grown to about $21.4 billion, still leaving the plan woefully underfunded.

    Under the PPA, plans on Jan. 1, 2008 as markedly underfunded as Central States would be required to come up with a plan to become more balanced.
    If the companies and unions cannot agree to a mutually acceptable plan, then the fund actuary will formulate one, potentially triggering cuts in benefits. That may have been pushed the Teamsters and UPS together on a pension issue that once had divided them.
    "It will go to default to the actuary, and it's cut, cut, cut the benefits," Sparling said.

    But any cutting wouldn't start on Jan. 1. There is roughly a three-month window for the remediation plans. Some union members say the union leadership has scared the members into thinking the contract must be quickly negotiated and ratified to meet the January deadline.

    "They can spin the worst-case scenario because no one wants to see the fund cut to nothing," said Sparling.
    Union officials said they are under executive order not to discuss the accord now.
    "This will ensure the integrity of the pension," Black said. "UPS will shore up the Central States fund."

    But many industry observers, including investment analysts, believe the company sees the withdrawal payment as an investment. The company will have greater control of a fund jointly managed by UPS and the Teamsters.

    "Over time, this will reduce pension expense for this group of people," Black said. "It will be less costly."

    Because both sides and Central States itself are in uncharted territory, said Sparling, it's unclear what the ramifications could be if the tentative agreement is not ratified by Jan. 1.

    The Teamsters union is managing the ratification vote and the company expects a final tabulation before Christmas.
    The important thing, Sparling said, is to save the fund itself. "These are very valuable funds," he said. "They're better than 401ks."

    Edward Wytkind, president of the Transportation Trades Department of the AFL-CIO, said he has no preference between a multiemployer or single company fund. "Both models exist. We've been successful in both. The real issue is to have stable defined benefit plans."

    Copyright 2007 Commonwealth Business Media
    All Rights Reserved
     
  17. browned_out

    browned_out Member

    Re: What happens if the contract isn't ratified on 1/1/08 when the regs go into effec

    But any cutting wouldn't start on Jan. 1. There is roughly a three-month window for the remediation plans. Some union members say the union leadership has scared the members into thinking the contract must be quickly negotiated and ratified to meet the January deadline.
    This is why we can vote no and send them back to the table to get some better langauge, and maybe clear up the split wage issue.
     
  18. TSup

    TSup Member

    Re: What happens if the contract isn't ratified on 1/1/08 when the regs go into effec

    Not quite.....
    Less than 65% falls into "Critical" status
    Less than 80% but above 65% falls into "Endangered" status
    http://www.dol.gov/EBSA/pensionreform.html