Pension in Jeopardy

[pkgdriver]

UPSBOI--agreed. there were some grumblings in the hourly group about this when it happened

 

[Cezanne]

Retiredone, you are wrong in so many ways. Here is the rest of the story and some facts to boot: It is not only the teamster leadership that made this pension mess an issue, the company had a hand in much of our underfunding for future benefits. Consider most of us started out in a company controlled pension fund (UPS Pension Plan), set up mostly for union part timers, it took an average of 8 to 10 years in order to have enought seniority to bid on a full time position. During those part time years the monetary contributions where set up with the prospect of paying as little as possible for it's union workforce, the company made a royal killing with it's profits by eliminating union full time positions that were required with monetary funding according to contract language. It replaced the positions with part timers who where for the most part college kids in the prime of their lives, for the first 3 years of their employment the company didn't have to pay into their pension. They had to be 21 to start their vesting years of five years, and forget about the health and welfare coverage for such a young, mostly single and healthy workforce.

The company did very well during the 70's , 80's and 90's, problem from the worker's point of view is that the ones who made out the best was the management workforce. Believe you are retired under the UPS Retirement Plan, which has been very good to it's participants. Can the company justify underfunding it's union employees and feeding that fund generious with it's profits. Tell me if I am wrong?

Everybody is wrong about the reasons for that "97" strike, Carey and the leadership saw the troubles with the union run pension funds long before the strike. It does not take a rocket scientist to figure these things out, back in the early 90's the trustees begin to see the plan participants dwindling and the retirees mutiplying. The strike was about creating full time positions to feed the union trusts and the company's continuing to a mostly part time workforce.

Currently we see the result of these decisions, the part time workforce has drastically changed, gotten alot older, more diverse and with that the glory days of minium health coverage is over. On somebody's desk there has to be statistics about the increasing premiums, let alone the workers compensation claims. It could be that the real changes that will occur will be on the management levels over the continuing aging of it's workforce with the possibility of no end in sight, could cause a little resentment with the management workforce, considering the wealth that the older ones collected primarily with the stock thrown about during the last three decades

Getting off my soapbox now, the story is not over yet! Everybody keep an eye on congress and the senate with this upcoming Pension Reform Act going down the pipe. That might play alot with the negotiations that will start this year or next.

 

[ja4079]

Did everyone get there letter from the Union and them wanting UPS to come to the table early for contract talks? Which I do think is a wonderful idea, but that's were the letter stopped with the useful information. They are worried about our pension and they want UPS to give more, why, since the Union is the one who has destroyed our pension not UPS. Now before everyone jumps to the defense of the Union I have been a driver for 27 yrs and I know what UPS does to all of us every day but I also know that the Union has done to all of us also, so I am not all UPS! We had a chance in 97 to fix this but we let the Union take of us. Not a wonderful idea now!

 

[wkmac]

Everybody is wrong about the reasons for that "97" strike, Carey and the leadership saw the troubles with the union run pension funds long before the strike. It does not take a rocket scientist to figure these things out, back in the early 90's the trustees begin to see the plan participants dwindling and the retirees mutiplying. The strike was about creating full time positions to feed the union trusts and the company's continuing to a mostly part time workforce.

Cezanne,
Interesting post to say the least and thought provoking as well. I wouldn't go so far as to say everybody is wrong in the sense that people for the most part are only repeating what was told to them by the various union leadership (locally, nationally) during that whole process. Even here in my local area I had one union official say it was about protecting good pensions while another said it was about FT jobs creation. There's truth in really both explainations.

I will also agree in some respect your explaination of the loss of FT to PT jobs being a boom for the company and at the same time placing the pension at further risk. However, I'd also argue that the company has ever right to construct it's business as it see's fit and it so did all with the blessing of the union over the years. Even the move in 82' to the $8 starting wage was a cooperative effort IMO and many a management person who works in the trenches now and having been around for some years is at least quietly questioning that logic now as they see the new workforce we get now as a result of this low starting wage which has moved up but oh so slightly.

I'd also argue that why should UPS be forced to modify it's workforce (more FTers) just to insulate the various Teamster pension funds from a collasping membership as a result of Teamster bankrupt trucking companies especially during the 80's? Seems to me the Teamsters may have been better served in the 80's having read the political Tea leaves better and seeing the impact of what deregulation of trucking would have and then work with the companies to adapt to be successful. Had they done that, it's possible (not probable mind you) some would have survived and the pension problems today may not be a severe.

As to the comment that Carey and others saw the problem and that the trustees to quote you, "back in the early 90's the trustees began to see the plan participants dwindling and the retirees multiplying" and I completely agree with you on that and will add this to it. UPS was also fully aware because although they specifically weren't represented on the CS board by a UPSer for example, they were represented by the equal number of "employer trustees" and my guess is they took part in some fashion of selecting those individuals and then being completely aware of the financial status and demographic reports as it relates to those funds. For "ANYONE" IMO to suggest that UPS was a "UNKNOWING" party in all of this is at best ill-informed. I also believe that knowledge along with an attempt to scuttle the strike in 97' was the motive behind the pension offer 3 days (less than one business day) before the strike took place.

Now here's my question to you but let me set the table first. Leading up to the 97' strike, especially in the CS covered area, there was a growing and growing movement to put pressure on the union leadership to raise retirement levels. UPS knew this also and is a very important point in the history of what happened. Most all union leaders I heard at the time played to this growing voice and said we need the make this happen. This also included Mr. Carey as he expressed this same regard on a campaign visit to the Atlanta area prior to his election as union President when the question was posed by a local member about the CS payout structure. Now as we both agree, everyone knew the pending and growing danger so that being the case, then why very soon after the 97' strike did Mr. Carey along with the union leadership including ALL the trustees let this happen and none offered a voice of concern or warning? Carey never offered along with any other union leader that this shouldn't be done at this time because of the already stated reasons and neither did UPS but I would question as to whether that was their place to begin with. In fact, labor law may have prevented them from saying so but that's only a guess on my part. It's ironic when UPS wants to speak it does find a way so there you go! There are/maybe a number of answers here but I'm curious as to what insight you might have in this area as it relates to why Carey went ahead and greenlighted pension increases knowing the pending ramifications of doing so in the future?

It's ironic that the biggest boom for FT jobs at the highest level was not via some contract article but was in fact a gift from good ole' FedEx. You see for years they maintained their movement of merchandise on the road instead of on the rail like UPS and thus they did had better lane enhancement for some time in transit from hub to hub. Generally speaking they slowed down when it came to the delivery point and we tended to catch up in that area. However for FedEx that began to improve and UPS saw it and responded with the first of continuing lane enhancements back in February that was nothing more than taking volume off the trains, putting on Feeder drivers and moving the volume over the road. In other words, it was the pure demands of business that helped created the biggest and most promising jump in FT jobs in our area because all those Feeder drivers moved up from the package ranks which opened up package driver jobs for Pters'. In other words, the business demanded more Fters. Seems to me that one area where we can help our own problem of pension concerns is to grow the business in areas where the need for more Fters is obvious. JMO.

BTW: Get back on your soapbox when you like as I enjoyed the preaching!

 

[wkmac]

Did everyone get there letter from the Union and them wanting UPS to come to the table early for contract talks? Which I do think is a wonderful idea, but that's were the letter stopped with the useful information. They are worried about our pension and they want UPS to give more, why, since the Union is the one who has destroyed our pension not UPS. Now before everyone jumps to the defense of the Union I have been a driver for 27 yrs and I know what UPS does to all of us every day but I also know that the Union has done to all of us also, so I am not all UPS! We had a chance in 97 to fix this but we let the Union take of us. Not a wonderful idea now!

I agree with the early table talks but moreso to prevent FedEx from taking advantage of the 08' deadline to scare customers. That said, I haven't seen this letter myself but assuming it true and the IBT being the party that sent the letter I wonder if we are about to see a contract extension like the 1985' contract but with another similarity. If memory serves me, back in 1985' in the CS area we got no raise as these monies were taken for health and welfare benefits and I can't remember if the next year was the same or we did get that raise. Question to the CS covered panel, are you willing to forego raises in August of 06', 07' and maybe further to shoreup the pension plan and extend the existing contract for how long? Are you willing to give up option days or a week of vacation annually so that these funds could be moved to shore up CS pension plan? Nothing is free and UPS will want something in return because if I were them I know I would.

It was easier for UPS to pony up in the days of the private UPS but now in the public realm it will be no piece of cake. You can take that to the bank! Also if the IBT stumbles on this one look for the APWA to be in position to take full advantage as the continuing decline of current UPS employees being also union members grows less and less especially among longtime employees.

 

[retiredone]

Retiredone, you are wrong in so many ways. Here is the rest of the story and some facts to boot:

The complete original post appears above. I simply don't think these arguments have merit. The company encouraged part timers primarily because they suited the business need of short sort spans to meet service requirements. If we had more full timers, the burden on the union pension plan would increase with the additional participants drawing benefits. I would argue that, since pension contributions were made for part timers who statistically are less likely to burden the plan by drawing benefits, the use of part timers helped pension solvency. And then there is the comparison to other Teamster pension plans which are solvent and paying generous benefits. UPS used part timers all over the country. If the problem was with UPS, why aren't all the plans suffering? I simply don't follow the logic of the prior post, and I believe it is factually wrong and conflicts with obvious facts.<?xml:namespace prefix = o ns = "urn:schemas-microsoft-comfficeffice" /><o></o>

 

[wkmac]

The complete original post appears above. I simply don't think these arguments have merit. The company encouraged part timers primarily because they suited the business need of short sort spans to meet service requirements. If we had more full timers, the burden on the union pension plan would increase with the additional participants drawing benefits. I would argue that, since pension contributions were made for part timers who statistically are less likely to burden the plan by drawing benefits, the use of part timers helped pension solvency. And then there is the comparison to other Teamster pension plans which are solvent and paying generous benefits. UPS used part timers all over the country. If the problem was with UPS, why aren't all the plans suffering? I simply don't follow the logic of the prior post, and I believe it is factually wrong and conflicts with obvious facts.fficeffice" /><O></O>

retired,
PT hourly pension at least in my area is all UPS and has nothing to do with union pension plans. In fact, in the case of Pter's regarding pension the company comes out to the good as the vast majority never stay long enough to collect so the cost to the company in at best minimal. It's also another reason IMO that made good sense to fold the Fters in with the Pters and let them subsidize us Fters when we reach the good life! Compell UPS by contract to contribute for every pter instead of pocketing the money and then reap the rewards. Ironic part is UPD likely would go for it as this would be less costly and less a threat over the longhaul than what they face now via the many union pension funds.

 

[Cezanne]

Retiredone,

Like Wkmac referred to is that most of the part time pensions are controlled by UPS, especially in the Central States funds. I believe that in the New England district and several other areas that part timers are included in the teamster run pension, and health and welfare trusts. Guessing the contributions are figured out per Article 34 Master to calculate the dollars put into that plan. Could be one of the reasons that other funds are not having the difficulty that Central States is currently going through, but also could not be getting the whole story with those funds also. The Central States reduction really caught most of us by surprise, everybody thought the fund was find and dandy till after 2003. The line about a mobile, flexible part time workforce to conform to the hours needed to do the job will not go. considering that all these combo positions that the company had to create after the "97" contract shows that you can conform the work required with full time positions. Not that hard, one part time position add to another equals one full time. Guaranteed that this pension underfunding has been on the agenda of UPS for many decades, just from studying the job description of any pension or health and welfare trustee, could imagine that this problems was forecasted way before the cuts took effect.

Wkmac, I still remember Carey going through our local back in the early 90's running on a primarly TDU/ increase our pension campaign. My opinion is that with the company's efforts to take over control of the pension and health and welfare funds that really was brought to the table back in "93", he was forced to put pressure on the trustees to increase the benefits in the Central States area. The "Perfect Storm" scenario made famous by our visting representatives may have some to do with the pension cuts, but most of it was due to the wasting away of the pension's base, the younger, contributing participants.

A couple of things has to happen to right this ship, first you need more paying participants in the plans. Every full time position has to be priority one with the teamsters. The other is going to be a reduction of benefits when social security kicks in, already the battle is being fought over health coverages for all retirees. It appears that one of the solutions is to keep you from retiring early or at least till medicare or medicad kicks in, less cost for the funds, company or union. We all got to face it, the days where you can draw two pensions as my father did are ending, early retirement is not an option for most of us the way things are going, not just with UPS but nationwide. Question should be asked why the push for individual 401K plans with companies eliminating pension and health and welfare plans, there is a plan out there...more to the story.

 

[olebrownie]

The company did very well during the 70's , 80's and 90's, problem from the worker's point of view is that the ones who made out the best was the management workforce. Believe you are retired under the UPS Retirement Plan, which has been very good to it's participants. Can the company justify underfunding it's union employees and feeding that fund generious with it's profits. Tell me if I am wrong?

I believe you are wrong. The company has done well, not as well in the 70's as in the 80's and 90's. But I don't see how you believe the company underfunded it's union employees.
All contributions were negotiated amounts. As many posters have noted, many plans, especially those well populated by UPS employees and those that recieved the part time contributions, have had outstanding returns and are funding excellent pensions.
Any explanation that Carey or any other Teamster officials foresaw upcoming pension issues just points out the foolishness of increasing benefits the plans couldn't afford.

 

[retiredone]

Retiredone,

Could be one of the reasons that other funds are not having the difficulty that Central States is currently going through, but also could not be getting the whole story with those funds also.

The Central States reduction really caught most of us by surprise, everybody thought the fund was find and dandy till after 2003. The line about a mobile, flexible part time workforce to conform to the hours needed to do the job will not go.

Guaranteed that this pension underfunding has been on the agenda of UPS for many decades, just from studying the job description of any pension or health and welfare trustee, could imagine that this problems was forecasted way before the cuts took effect.

Every full time position has to be priority one with the teamsters. as my father did are ending, early retirement is not an option for most of us the way things are going, not just with UPS but nationwide..

I am stunned that the current day problem was a surprise to anyone. There were widely published, although likely ignored, news reports about union trustees being jailed for pension fraud. It is simply ignoring reality to claim that this was an unexpected problem. And if the rank and file doesn't learn from past mistakes, they are bound to repeat them.

It is also a bad idea to ignore success. The problems are limited: primarily to one mismanaged fund. If the rank and file ignores the lessons learned by successful funds and simply pretends the company is the problem, you will continue to have serious problems in the future.

Putting it another way, if full time membership (employer contributions) increase, but the number of people eligible for beneifts increases proportionatly, you will simply have a bigger problem to address in the future.

If someone believe that UPS had a secret agenda to take advantage of the union, you would also have to accept the idea that the union leaders were stupid. This is not the case. Certainly with all the reports of theft and mismanagement, the employer who abided by the contract is not to blame.

The erosiion of Teamster union jobs nationwide contributed to this problem. Where before there were many employers to pay the pension, now there are few. In fact, there is one main contributor. Expecting that one contributor to artificially create additional full time jobs would simply bankrupt the company and "kill the goose that laid the golden egg". I agree that expanding full time Teamster jobs is a must, but relying on one employer to do it is simply putting all your eggs in one basket and doomed to failure.

 

[retiredone]

Putting it a slightly different way: In addition to out and out mismanagement by the trustees, the Central States has to deal with the same issues that the social security system has to deal with. In the past, we had a pyramid (scheme) where there were many contributors for the folks collecting benefits. The pyramid has flattened. There are fewer working members compared to the vast number of retirees collecting benefits. Given the misappropriation of money in the early years, combined with the erosion of employer payers, there are simply too many people collecting benefits and too few workers contributing. The pyramid is turning upside down.

Learn from history or be doomed to repeat it..