YRCW bankruptcy impact on UPS employee pensions
- Thread starter Catatonic
- Start date
D
Dis-organized Labor
Guest
I recall watching them a few months ago when the stock was $3. +/-. Things look desperate now. Don't know what their P&L shows, but Yahoo Financial Boards and their stock price paints a grim picture.
Good time to pick up some "Gently Used Trucks" Perhaps even a new acquisition
YRCW's employees stopped being active participants in the various Teamster multi-employer pension funds several months ago. Therefore those employees have not been gaining any further pension credits.
If YRCW goes bankrupt, pension funds will benefit from employees who had less than the required five years of vesting. The funds get to keep those years of contributions and don't owe those employees a cent.
Some vested employees will find they are "retireing" prematurely and have to settle for a reduced pension because they don't have sufficient age or pension credit to retire at the intended higher rates. The funds benefit anytime an employee is forced by circumstances to settle for a lesser pension amount, or is required to wait until a certain age, like 65, to begin collecting. (A 25-year old with the required five year's vesting, would be entitled to a trivial pension payable forty years from now!!! Imagine what inflation will do to the purchasing power of that already small amount.) The funds benefit from the erroding effects of inflation on all future benefit payments because pensions are not protected by a cost-of-living adjustment.
Some employees will get other jobs covered by one or another Teamster pension plan, and will continue to acrue pension credits based on the contributions made by their new employers on their behalf. The ability to switch employers and still be covered by pension contributions is what multi-employer plans are all about.
The pension plans will sue YRCW to collect the Withdrawal Liability owed and have a claim on whatever assets the bankrupt company may still have, if any. This is where the funds will loose money.
The funds will have one less major contributing employer ($40 million per month) helping to keep the funds afloat. And one less major employee group earning entitlements to future benefits.
The funds can not cut pension credits already earned by UPSers unless a fund is in dire financial straights. They can cut future benefit accrual rates if they feel it is necessary to prevent getting into dire straights.
If YRCW goes bankrupt, pension funds will benefit from employees who had less than the required five years of vesting. The funds get to keep those years of contributions and don't owe those employees a cent.
Some vested employees will find they are "retireing" prematurely and have to settle for a reduced pension because they don't have sufficient age or pension credit to retire at the intended higher rates. The funds benefit anytime an employee is forced by circumstances to settle for a lesser pension amount, or is required to wait until a certain age, like 65, to begin collecting. (A 25-year old with the required five year's vesting, would be entitled to a trivial pension payable forty years from now!!! Imagine what inflation will do to the purchasing power of that already small amount.) The funds benefit from the erroding effects of inflation on all future benefit payments because pensions are not protected by a cost-of-living adjustment.
Some employees will get other jobs covered by one or another Teamster pension plan, and will continue to acrue pension credits based on the contributions made by their new employers on their behalf. The ability to switch employers and still be covered by pension contributions is what multi-employer plans are all about.
The pension plans will sue YRCW to collect the Withdrawal Liability owed and have a claim on whatever assets the bankrupt company may still have, if any. This is where the funds will loose money.
The funds will have one less major contributing employer ($40 million per month) helping to keep the funds afloat. And one less major employee group earning entitlements to future benefits.
The funds can not cut pension credits already earned by UPSers unless a fund is in dire financial straights. They can cut future benefit accrual rates if they feel it is necessary to prevent getting into dire straights.
UpstateNYUPSer(Ret)
Well-Known Member
Another option, and one that is currently being implemented in my pension fund, is to raise the minimum retirement age, regardless of years of service. It used to be we could retire at any age if we had 30 years of service. They are now saying that we need to be at least 57 yrs old with at least 30 years of service to qualify for a normal pension.
brownmonster
Man of Great Wisdom
dannyboy
From the promised LAND
their numbers given dont add up. the numbers stated for the teamster employees would mean that the average employee is pulling down a bit over 171 thousand a year. aint no way. me thinks that either the numbers are just wrong, or someone is inflating for personal reasons....
d
d
Old International
Now driving a Sterling
Isn't Central States already underfunded? I seem to remember a letter that stated that even with the UPS bailout, the fund was still some 32 million short of where it needed to be?
Dustyroads
Well-Known Member
Yes, the Central States fund is seriously underfunded. They have sent all of the participants notices of that fact. Now that UPS is no longer contributing to the fund, it is struggling. If YRC goes under, that is one more contributor gone while the fund still has obligations to vested YRC employees. Should the Central States fund fail, it will put a much greater responsiblility on the new UPS/Teamster plan that would have to pick up the difference between the government guarantee and the guarantees made in the new plan. On more uncertain ground are the Central States members who have already retired and don't have the protections offered those in the UPS/Teamster plan.
At age 65 Central States is responsible for the retirees that belong to the new UPS pension. If Central States goes into the PBGC there will be a huge drop in benefits paid out. UPS has agreed to make up the difference.
But this is a contract to contract agreement! UPS can negotiate new language win we go back to the negotiating table. In fact, they can change the agreement any time they want because they are legally required to maintain the UPS plan in a fiscally responsible manner.
This is the very reason the Teamsters fought to keep the pension out of the Company's control. But for some reason, in our current contract we gave it all away for what amounted to 3 months of income for Big Brown. What a deal!
But this is a contract to contract agreement! UPS can negotiate new language win we go back to the negotiating table. In fact, they can change the agreement any time they want because they are legally required to maintain the UPS plan in a fiscally responsible manner.
This is the very reason the Teamsters fought to keep the pension out of the Company's control. But for some reason, in our current contract we gave it all away for what amounted to 3 months of income for Big Brown. What a deal!
dannyboy
From the promised LAND
yeah, we dont want ups to succeed in keeping the plan in a fiscally responsible manner. heaven forbid. so when the ship goes down, instead of saving the number that will actually fit in the lifeboat, you think it better for all to drown together?
you are so anti company that you resort to lies? its the ups/teamster retirement, not just ups. it used to be just teamsters, and you see where that got you.
its a shame that a retirement plan that so many depended on is getting trashed by miss management because of the inactivity of its current members, and the demands of those already drawing a pension.
watch and see if what is playing out at the federal level wont have the same impact because of the inactivity of voters.
what are you going to do when you and ups have to start paying taxes on your benifit payments?
its coming.
d
The points I was trying to make are:
1--We gave the pension away for pennies. We took the first offer. The Union not only accepted it. They "TOLD" us to vote for it!
2--UPS employees shouldn't expect the benefits to remain what they are now. Be aware of the fact that UPS has the right to lower the benefits if necessary.
You are right. The problems we are facing are allowed to continue because of members lack of involvement. And that is just the way the Company and the Union want it!
1--We gave the pension away for pennies. We took the first offer. The Union not only accepted it. They "TOLD" us to vote for it!
2--UPS employees shouldn't expect the benefits to remain what they are now. Be aware of the fact that UPS has the right to lower the benefits if necessary.
You are right. The problems we are facing are allowed to continue because of members lack of involvement. And that is just the way the Company and the Union want it!
My New England fund did the same thing. Every time we approach the finish line, they move the goalpost. They've done it in the past. I believe they are about to do it again in the near future.
Catatonic
Nine Lives
At least UPS has never done that. It's the same now as it was 35 years ago.
Last edited:
And let's not forget the ten years of lackluster returns on UPS stock, not to mention that whole OPL thing.
1989
Well-Known Member
Upsdriver88
Well-Known Member
Y'all need to read the contract again. Article 34 Section 1 paragraph (I), subsection (6) on page 85 of the UPS Master Agreement...: The UPS/IBT Plan will recognize full-time service in the CS (Central States) Plan for determining eligibility for the benefits in this section and will offset at Normal Retirement Age the benefits accrued from the CS Plan commencing at Normal Retirement Age. If the benefit paid from the CS Plan is reduced as permitted or required by law, the amount of such reduction shall not be included in this offset. I had a lawyer friend of mine read that part and she indicated the even though we were told UPS would pay everything if something happened to Central States during the life of this contract, that part made it sound like they would not. If that is the case, WHY THE HELL DID WE SELL OUR PENSION TO UPS? WHY DID THE UNION TELL US IT WAS A GREAT DEAL? AND WHY DID UPS NOT OPPOSE UPS FREIGHT BEING UNIONIZED? COULD IT BE THAT THE 6.1 BILLION UPS PAID CENTRAL STATES AND THE IBT JUST SOLD US DOWN THE RIVER SO THE UNION COULD FINALLY ORGANIZE OVERNIGHT/UPS FREIGHT. SOMETHING STINKS IN THIS CONTRACT AND IT MAKES ME WONDER WHAT IS GOING HAPPEN WHEN CENTRAL STATES FINALLY GOES UNDER (PROBABLY NEXT YEAR IF YRC GOES BANKRURPT). BETTER SAVE MORE IN YOUR 401K'S!
You make this statement like $6.1 billion is peanuts. It's a huge amount of money, and Central States needed the money to keep the pension funded. Who knew that the stock market would slide and pension reserves would decrease. I don't believe the union "sold you down the river." The union was doing what needed to be done to help the Central States pension. UPS was doing what was in its best interest, in cutting the link between the Central states pension and the UPS employees/teamsters' pension.
This was a big problem and UPS paid big dollars ($6.1 billion) to protect itself and the upsers (both teamsters and management) that depend on UPS continuing to pay good wages and benefits. In the end, this pension agreement was the best thing for Central States UPS teamsters and the company itself.
Old International
Now driving a Sterling
The split from Central States was the best thing UPS did for the employees. We were paying the most as a company into the fund, yet the retirees were not getting lions share of the benifits. At least with UPS running the show, We stand a better chance of keeping our pensions. With Central states, we were in bad shape, and it was getting worse quick.
I would aqree with most of your statement, the problem that most of us have with the Central States dealings is the lack of correct information over the years to the funding levels. Sure who could foresee the current recession and the effects that it had with all the pension trusts, but how has the IAM mechanics fund that is funded by UPS and maintained by the union maintain thier current benefits? I could be wrong on the totals, but I believe it is at around or over 300 dollars a service year or 6,000 per month. Have they put that much more into their trust, or were they smarter with their investments? Another case in point is the current level of funding in the Teamster's run Western Conference fund, which has close to the IAM benefit levels. If you have even had a passing interest in the Central States fund even a half-wit would know something is wrong with the administrative end of this pension trust, let alone the politics associated with promising increased benefits in order to be elected to these union positions.
The real question is whether the Feds will allow Central States to go under, I believe that they will not. Just study the Pension Reform Act of 2006 and see how much effect it will have on all these underfunding pension trusts.
The fact that the monetary contributions going into these funds over the years that was negotiated as part of our wages was more than enought to cover the promised benefits and more some is what is frustrating. All we are getting is coverups/misinformation and finger pointing, it is sickening.
$6.1 billion is peanuts!. After taxes it came out to $3.2 billion. That means that with about 3 months gross receipts UPS has gotten out of the Central States black hole. I can't blame them. But I do blame our union officials for letting it happen on the cheap. And it was for one reason. Card check at Overnite. Well guess what! That was going to happen anyway.
Here is a project for you. This week with your extra time off try to find out ANYTHING about your IBT/UPS pension plan. Call UPS. Call IBT. Look at both websites. Go to upsers.com. Be sure to have quite a bit of time for this. And be prepared to learn little or nothing.
Now that should be a warning signal as it is in any instance where you can't seem to talk to anyone about your money. Be afraid. Be very afraid!
Here is a project for you. This week with your extra time off try to find out ANYTHING about your IBT/UPS pension plan. Call UPS. Call IBT. Look at both websites. Go to upsers.com. Be sure to have quite a bit of time for this. And be prepared to learn little or nothing.
Now that should be a warning signal as it is in any instance where you can't seem to talk to anyone about your money. Be afraid. Be very afraid!
Similar threads
