It would be promising if it went to individual accounts instead of being run like social security. That money should perpetually grow if invested properly. Managing what is coming in to go to those already retired is a gambit that will not succeed. It is doomed to fail from the start.
wkmac
Well-Known Member
I don't know the exact number like you posted above Scratch but the CS documentation at the meeting (I was at the same meeting) and documentation published by CS via it's quarterly Teamwork publication has documented the fact that in 1980' there we 3 active contributory employees to every retired recipent drawing benefits. At the time of the benefit cuts 2 years ago that ratio was 0.9 active contributory employee to every retired recipent drawing benefits and that demographic is expected to worsen as it pertains to active contributory employees. As it relates to all the smoke and mirrors thrown around by everyone as it relates to CS and the retirement, this one fact has stuck in my head and has been the cornerstone of the real problem we face. Most new IBT organizing that has come about have been small companies with 10's and in some better scenarios a few hundred employees but none have risen the numbers of 1000's that would replaced the 1000's that have left do to bankruptcy, etc. especially during the 1980's.
It's ironic that one of the main concerns about the future of Social Security is the same demographic ratio comparsion that CS is dealing with. In the case of SS, it's the reduction in child birth after the baby boom generation as in the near future retirees on SS could outnumber workers in a sense making the balance loopsided but over time as death rebalances the books things could level themselves out but in the case of CS, they don't share the same advantages as a gov't program so waiting on the grim reaper to correct matters may not work in the long run.
I'm not trying to debate SS but rather to show how the problem of demographics that threaten SS are exactly the same as with CS for example but unlike SS who has time to help correct it's unbalance, I'm not sure CS will have that same luxury.
JMO.
J
JonFrum
Guest
Moody's has an August 2006 15 page analysis of major multi-employer plans, rates their underfunding status, and its effect on the contributing employers. See Appendix B where many Teamsters plans and others are listed under "Industry:Transportation." (A 315kb Adobe PDF file.)
http://www.ifebp.org/pdf/moodysmethodology.pdf
- - - - -
The Western Conference of Teamsters Pension Trust, a fund even larger that Central States, and in much better financial shape because of its decision to avoid the stock market during the downturn, is at The Western Conference of Teamsters Pension Trust
An Internet search for "Teamsters Pension Plans" will provide links to the websites of the various plans and to other articles and sites as well.
- - - - -
The International Brotherhood of Teamsters pension and health and welfare trusts collectively hold nearly $100 billion in assets. ---from the Teamsters website.
To read the excuse, I mean viewpoint, of the Teamsters, do a search of International Brotherhood of Teamsters using "perfect storm" as your search term. Or just click on this preloaded search . . .
Search Results
I don't deny that one can fall victim to a "perfect storm" through little or no fault of one's own, especially if out at sea. (The real-life Perfect Storm story about the ill-fated fishing boat crew from the port of Gloucester, Ma. is within the jurisdiction of my local 42.) But if you're standing on dry land, like the trustees were, you're suppose to take shelter as soon as you realize things are taking a turn for the worse. You don't just sit out in the open, and let the storm wash over you.
- - - - -
The big problem I have with so many who say the pension funds' problems are caused by a lack of new members ("actives"), is that any money contributed by (on behalf of) new members is for their future benefit. It's not available to be used to prop-up the fund as a whole or to pay for current retirees. Social Security works(?) that way, but not pension funds. At least they aren't supose to. Retirees are paid out of funds they and their fellow members contributed years ago. New members contribute now so that money will be available, with interest, later when they retire. The attitude that new blood will reinvigorate a pension plan has a bit of truth in it, but anyone who intends to solve the fund's financial problems with the new money has a bit of larceny in his heart. Similarly, anyone who says a union can fix its financial problems by organizing new members is, in effect, admiting they plan to take that new money, which should be earmarked to provide services to the new members, and instead redirected elsewhere. Taking on new members is a good thing, but it is not a big financial plus. The new money is for the benefit of the new members. The organization is bigger and richer, but so are its obligations and expenses. It's not free money. TANSTAAFL.
http://www.ifebp.org/pdf/moodysmethodology.pdf
- - - - -
The Western Conference of Teamsters Pension Trust, a fund even larger that Central States, and in much better financial shape because of its decision to avoid the stock market during the downturn, is at The Western Conference of Teamsters Pension Trust
An Internet search for "Teamsters Pension Plans" will provide links to the websites of the various plans and to other articles and sites as well.
- - - - -
The International Brotherhood of Teamsters pension and health and welfare trusts collectively hold nearly $100 billion in assets. ---from the Teamsters website.
To read the excuse, I mean viewpoint, of the Teamsters, do a search of International Brotherhood of Teamsters using "perfect storm" as your search term. Or just click on this preloaded search . . .
Search Results
I don't deny that one can fall victim to a "perfect storm" through little or no fault of one's own, especially if out at sea. (The real-life Perfect Storm story about the ill-fated fishing boat crew from the port of Gloucester, Ma. is within the jurisdiction of my local 42.) But if you're standing on dry land, like the trustees were, you're suppose to take shelter as soon as you realize things are taking a turn for the worse. You don't just sit out in the open, and let the storm wash over you.
- - - - -
The big problem I have with so many who say the pension funds' problems are caused by a lack of new members ("actives"), is that any money contributed by (on behalf of) new members is for their future benefit. It's not available to be used to prop-up the fund as a whole or to pay for current retirees. Social Security works(?) that way, but not pension funds. At least they aren't supose to. Retirees are paid out of funds they and their fellow members contributed years ago. New members contribute now so that money will be available, with interest, later when they retire. The attitude that new blood will reinvigorate a pension plan has a bit of truth in it, but anyone who intends to solve the fund's financial problems with the new money has a bit of larceny in his heart. Similarly, anyone who says a union can fix its financial problems by organizing new members is, in effect, admiting they plan to take that new money, which should be earmarked to provide services to the new members, and instead redirected elsewhere. Taking on new members is a good thing, but it is not a big financial plus. The new money is for the benefit of the new members. The organization is bigger and richer, but so are its obligations and expenses. It's not free money. TANSTAAFL.
tieguy
Banned
In my opinion the problem with SS is that while there is some social good with the program its main purpose may have been to create jobs for good democrats. The beurocracy of SSA is a drain upon the funds meant to help retirees and those who become dependent/ disabled. It also provides an interesting addition to this debate. Were we to invest all the money we pay to SSA throughout our working lives we would have a nice chunk of change possibly be millionaires by the time we retire. The only thing that keeps me from endorsing total privitization is the fear that not all would invest their money wisely. But even then it would be hard not to do better then the SSA.
J
JonFrum
Guest
The top three rules of investing are: Diversify, Diversify, Diversify.
Now let's compare Multi-employer pension funds to Single-employer pension funds. . . .
Both funds are insured by the "guarantees" of the nearly bankrupt Pension Benefit Guarantee Corporation, and both funds are run by trustees who may make or loose lots of money as they invest the fund's assets. There is almost no way to tell weather a particular fund's trustees will perform well or badly in their investment decisions. You can point to funds of both types that did badly, or that did well. It's unfair to compare a fund of one type, with a poor investment record, to a fund of the other type, with a good investment record, and claim the first type of fund is therefore inferior. Investing is risky business, and is a wildcard in pension fund analysis. Try to keep poor investment performance seperate from a comparative analysis of plan features.
Multi-employer funds have many contributing employers, about 3,500 in Central States, about 5,200 in the Western Conference fund. Single-employer funds are totally dependent on their one-and-only contributing employer. If it experances financial trouble, or goes bankrupt, so does the pension fund. Poof!
Multi-employer funds allow members to switch jobs amongst all their contributing employers, either voluntarily, or as the result of layoff, termination, bankruptcy, subcontracting, offshoring of work, etc. Single-employer funds, have you over a barrel. You can't switch employers because there is only one employer in the fund. You are also under heavy pressure to "behave" at all times especially when contemplating contract changes, strike pre-authorization votes, actual strikes, picket line activity, etc. If you are fired, or forced to quit through a campaign of harrassment or pressure, you are not just out of a job, your pension is frozen at the current level. You probable wern't coincidently at the end of your career with your retirement papers in hand ready for submission, so you must settle for whatever the rules of the fund gives you based on your premature withdrawal from the fund. If you were not vested, you loose all your contributions. They are concidered abandoned and are the property of the fund. If you were vested, you must wait until you are of adequate age to collect a pension, either Early Retirement at 55 or so, or Normal Retirement Age at 65 or so. The pension will be smaller than had you worked a full career, and the fixed dollar amount may have been stagnant for years, so it won't buy as much when you get it as when it was first calculated. (This is also true of Multi-employer funds when a participant stops working prematurely, and doesn't get a new job with another contributing employer.)
Multi-employer funds have Recprocity Agreements with many other funds so you can continue building Pension Credit as you move from one employer to another who is outside the original fund, but covered by a fund with a reciprocal agreement . Single-employer funds may well not have this feature. (If any one knows the policy of UPS on this or other pension matters, please post it.)
Multi-employer funds normally invest in a broad mix of stocks, bonds, real estate, etc., Single-employer funds may try to prop-up the value of the single employer's stock by loading up on that stock. Often the company also encourages employees to own its own stock, offering discounts on purchases as an incentive. UPS goes further than most, in expecting more levels of management to buy and hold UPS stock. This is a violation of the Diversify-Your-Investments Principle and also creates a somewhat artificial demand for the stock. At least until those who bought stock then eventually all start selling.
Multi-employer funds are charged a lot less in insurance premiums by the PBGC, and have much lower coverage than single-employer funds because many, including the PBGC and Congress, but not Tieguy, recognizes that they, in effect, have their insurance built in to their very structure. Insurance is the spreading of risk. Multi-employer funds already spread their risk by having many contributing employers. Some Multi-employer funds have diverse employers but within a single industry. Others, like the Teamsters funds, are even further diversified by having employers in multiple industries. The more diversity the better, and the safer. The large Teamster funds are so diversified in this regard that they almost mimic a smaller version of the US economy itself. But if the entire economy collapses, say, from some action by terrorists, then, yes, the Teamsters funds will collapse right along with it. That's life. There are some risks you can't avoid. In investing there's a great deal of risk in owning a single stock; less risk in owning several diferent stocks; a lot less risk in investing in the S&P 500; and even less risk in investing in a portfolio of several different index funds.
Single-employer funds are better insured because they fail at 100 times the rate of multi-emplorer funds and so they have scared politicians to act to avoid panic. They need the safety net because they have such a bad track record. Their bad track record, in turn has caused a crisis in the PBGC which is in financial trouble itself but can only get out of the woods by raising money. To do that it has to raise premiums on single-employer funds even further, something the funds don't want to pay. The PBGC is stuck between a rock and a hard place. Single-employer funds pay a higher benefit when they go belly-up and are taken over by the PBGC, but this lone desirable feature only comes into play when your plan goes bankrupt! It's like someone bragging that they have average volcano insurance. OK. But the down side is you have to have molten lava flowing through your living room. Who wants that? Tieguy is focusing on a catastrophy and noting, correctly, that you would be better off in a single-employer fund on that one day. I agree. But you shouldn't knowingly be in a fund (of either type) that you expect will actually fail. Just as you should not live at the foot of an active volcano. The authorities may even forbid it. Calamities should be largely unexpected. That's what insurance is for. Not for dangers that are known and ready to occur. It's the many features of pension plans under normal circumstances that we need to base our judgements on, not the one feature that applies only when disaster strikes. Besides, even the single-employer insurance payouts by the PBGC cut your monthly benefit, just not as much as the multi-employer payouts. Basically, Tieguy is asking us to leave a very large, safe, (but not pretty) boat with inadequate insurance, and step into a small craft (I'm not sure if it's pretty or not), because the small craft has mediocre insurance that only applies, of course, if we capsize and sink.
[Continued below . . . ]
Now let's compare Multi-employer pension funds to Single-employer pension funds. . . .
Both funds are insured by the "guarantees" of the nearly bankrupt Pension Benefit Guarantee Corporation, and both funds are run by trustees who may make or loose lots of money as they invest the fund's assets. There is almost no way to tell weather a particular fund's trustees will perform well or badly in their investment decisions. You can point to funds of both types that did badly, or that did well. It's unfair to compare a fund of one type, with a poor investment record, to a fund of the other type, with a good investment record, and claim the first type of fund is therefore inferior. Investing is risky business, and is a wildcard in pension fund analysis. Try to keep poor investment performance seperate from a comparative analysis of plan features.
Multi-employer funds have many contributing employers, about 3,500 in Central States, about 5,200 in the Western Conference fund. Single-employer funds are totally dependent on their one-and-only contributing employer. If it experances financial trouble, or goes bankrupt, so does the pension fund. Poof!
Multi-employer funds allow members to switch jobs amongst all their contributing employers, either voluntarily, or as the result of layoff, termination, bankruptcy, subcontracting, offshoring of work, etc. Single-employer funds, have you over a barrel. You can't switch employers because there is only one employer in the fund. You are also under heavy pressure to "behave" at all times especially when contemplating contract changes, strike pre-authorization votes, actual strikes, picket line activity, etc. If you are fired, or forced to quit through a campaign of harrassment or pressure, you are not just out of a job, your pension is frozen at the current level. You probable wern't coincidently at the end of your career with your retirement papers in hand ready for submission, so you must settle for whatever the rules of the fund gives you based on your premature withdrawal from the fund. If you were not vested, you loose all your contributions. They are concidered abandoned and are the property of the fund. If you were vested, you must wait until you are of adequate age to collect a pension, either Early Retirement at 55 or so, or Normal Retirement Age at 65 or so. The pension will be smaller than had you worked a full career, and the fixed dollar amount may have been stagnant for years, so it won't buy as much when you get it as when it was first calculated. (This is also true of Multi-employer funds when a participant stops working prematurely, and doesn't get a new job with another contributing employer.)
Multi-employer funds have Recprocity Agreements with many other funds so you can continue building Pension Credit as you move from one employer to another who is outside the original fund, but covered by a fund with a reciprocal agreement . Single-employer funds may well not have this feature. (If any one knows the policy of UPS on this or other pension matters, please post it.)
Multi-employer funds normally invest in a broad mix of stocks, bonds, real estate, etc., Single-employer funds may try to prop-up the value of the single employer's stock by loading up on that stock. Often the company also encourages employees to own its own stock, offering discounts on purchases as an incentive. UPS goes further than most, in expecting more levels of management to buy and hold UPS stock. This is a violation of the Diversify-Your-Investments Principle and also creates a somewhat artificial demand for the stock. At least until those who bought stock then eventually all start selling.
Multi-employer funds are charged a lot less in insurance premiums by the PBGC, and have much lower coverage than single-employer funds because many, including the PBGC and Congress, but not Tieguy, recognizes that they, in effect, have their insurance built in to their very structure. Insurance is the spreading of risk. Multi-employer funds already spread their risk by having many contributing employers. Some Multi-employer funds have diverse employers but within a single industry. Others, like the Teamsters funds, are even further diversified by having employers in multiple industries. The more diversity the better, and the safer. The large Teamster funds are so diversified in this regard that they almost mimic a smaller version of the US economy itself. But if the entire economy collapses, say, from some action by terrorists, then, yes, the Teamsters funds will collapse right along with it. That's life. There are some risks you can't avoid. In investing there's a great deal of risk in owning a single stock; less risk in owning several diferent stocks; a lot less risk in investing in the S&P 500; and even less risk in investing in a portfolio of several different index funds.
Single-employer funds are better insured because they fail at 100 times the rate of multi-emplorer funds and so they have scared politicians to act to avoid panic. They need the safety net because they have such a bad track record. Their bad track record, in turn has caused a crisis in the PBGC which is in financial trouble itself but can only get out of the woods by raising money. To do that it has to raise premiums on single-employer funds even further, something the funds don't want to pay. The PBGC is stuck between a rock and a hard place. Single-employer funds pay a higher benefit when they go belly-up and are taken over by the PBGC, but this lone desirable feature only comes into play when your plan goes bankrupt! It's like someone bragging that they have average volcano insurance. OK. But the down side is you have to have molten lava flowing through your living room. Who wants that? Tieguy is focusing on a catastrophy and noting, correctly, that you would be better off in a single-employer fund on that one day. I agree. But you shouldn't knowingly be in a fund (of either type) that you expect will actually fail. Just as you should not live at the foot of an active volcano. The authorities may even forbid it. Calamities should be largely unexpected. That's what insurance is for. Not for dangers that are known and ready to occur. It's the many features of pension plans under normal circumstances that we need to base our judgements on, not the one feature that applies only when disaster strikes. Besides, even the single-employer insurance payouts by the PBGC cut your monthly benefit, just not as much as the multi-employer payouts. Basically, Tieguy is asking us to leave a very large, safe, (but not pretty) boat with inadequate insurance, and step into a small craft (I'm not sure if it's pretty or not), because the small craft has mediocre insurance that only applies, of course, if we capsize and sink.
[Continued below . . . ]
J
JonFrum
Guest
[ Continuing . . . ]
Multi-employer funds do not allow employers to take money out of the fund. Single-employer funds allow the employer to skim money in good times and put it in the company's coffers, money that should be held by the fund for the inevitable rainy day.
Multi-employer funds pay benefits regardless of (in addition to) any retirement benefits you may be entitled to under Social Security or other plans. Single-employer funds may deduct these other amounts from your benefit check. This was a big non-starter during the 1997 attempted pension grab. But I'm not an expert, so if anyone knows different on this or any other matter, please post, preferably with proof, so we can all get to the bottom of it instead of endless opinionating.
Multi-employer funds are administered day-to-day by a (more or less) independent Fund Administrator. A single-employer fund is administered by a high-level member of management. Another non-starter in '97.
Multi-employer funds have an equal number of labor and management trustees, but the management trustees are from diverse companies. Single-employer funds have their management trustees all drawn from the upper levels of that one company. They may tend to vote in lock-step, saying "no" to most proposals to raise benefits, or improve plan features because they cost money. They may feel pressured to vote as upper management wishes because their careers depend on it. Multi-employer funds have management trustees that may have at least some independance, especially if they are the owners of their respective companies.
(In '97 I never understood how UPS was going to get the Teamsters to put forth an equal number of Teamsters officials to act as union trustees of the new plan, when the Union was adamantly opposed to the company plan, in the first place. And how could such trustees fulfill their "fiduciary duty" when they were opposed to the entire plan from the outset? It's like expecting clergymen to help judge a wet T-shirt contest.)
A single-employer fund participant is dependant on his employer for his job, his pension, his health & welfare coverage, and, if he owns company stock, to that degree, his personal investments, as well. Not a good situation in general, particularly bad at contract renegotiation time. This single employer, on whom you are so dependent, must not falter for the 35 years or so of your working career, and the twenty years or so of your retirement. And that's just for those who were there at the start. Subsequent waves of employees wil require the boat to stay afloat even longer. You are, in effect, making a very long-term bet (gamble?) that the company you join at age 17 or 21 will still be thriving when you're in your sixties, seventies, eighties, nineties, and beyond.
Or you could be run over by a bus tomorrow.
P.S. The single-employer plan proposed by UPS in 1997 had additional shortcomings that were specific to that particular plan, and so are not included in this post. Phew!
Multi-employer funds do not allow employers to take money out of the fund. Single-employer funds allow the employer to skim money in good times and put it in the company's coffers, money that should be held by the fund for the inevitable rainy day.
Multi-employer funds pay benefits regardless of (in addition to) any retirement benefits you may be entitled to under Social Security or other plans. Single-employer funds may deduct these other amounts from your benefit check. This was a big non-starter during the 1997 attempted pension grab. But I'm not an expert, so if anyone knows different on this or any other matter, please post, preferably with proof, so we can all get to the bottom of it instead of endless opinionating.
Multi-employer funds are administered day-to-day by a (more or less) independent Fund Administrator. A single-employer fund is administered by a high-level member of management. Another non-starter in '97.
Multi-employer funds have an equal number of labor and management trustees, but the management trustees are from diverse companies. Single-employer funds have their management trustees all drawn from the upper levels of that one company. They may tend to vote in lock-step, saying "no" to most proposals to raise benefits, or improve plan features because they cost money. They may feel pressured to vote as upper management wishes because their careers depend on it. Multi-employer funds have management trustees that may have at least some independance, especially if they are the owners of their respective companies.
(In '97 I never understood how UPS was going to get the Teamsters to put forth an equal number of Teamsters officials to act as union trustees of the new plan, when the Union was adamantly opposed to the company plan, in the first place. And how could such trustees fulfill their "fiduciary duty" when they were opposed to the entire plan from the outset? It's like expecting clergymen to help judge a wet T-shirt contest.)
A single-employer fund participant is dependant on his employer for his job, his pension, his health & welfare coverage, and, if he owns company stock, to that degree, his personal investments, as well. Not a good situation in general, particularly bad at contract renegotiation time. This single employer, on whom you are so dependent, must not falter for the 35 years or so of your working career, and the twenty years or so of your retirement. And that's just for those who were there at the start. Subsequent waves of employees wil require the boat to stay afloat even longer. You are, in effect, making a very long-term bet (gamble?) that the company you join at age 17 or 21 will still be thriving when you're in your sixties, seventies, eighties, nineties, and beyond.
Or you could be run over by a bus tomorrow.
P.S. The single-employer plan proposed by UPS in 1997 had additional shortcomings that were specific to that particular plan, and so are not included in this post. Phew!
If it looks like a subsidy and walks like a subsidy...
Re: UPS Pension Subsidy of NonUPSers
Let me simplify this for you. UPS contributes to a multi-pension plan administered by the Teamsters. Some of the companies in our plan are Yellow, Consolidated, Roadway, ABF and UPS. Yellow freight has 8625 retirees and 6546 contributors. Consolidated (out of business) has 792 retirees and 0 contributors. Roadway has 7520 retireees and 6385 contributors. ABF has 4666 retirees and 2655 contributors. UPS has 6865 retirees and 40000 contributors. We are paying the bulk and receiving only 40% return. We need to vote the Teamsters out and start our own union. The UPS pilots did it and now they are an independent union for UPS pilots only. They just received a 26% salary increase and a better pension. If they can do it, then we also can follow their lead and secure our future.
Re: UPS Pension Subsidy of NonUPSers
Excellent point. Why do the Teamsters refuse to open the books? It is supposed to public record. Is it because the pension fund has less money than they say, or is it because the Teamsters do not want us to see where the money is mismanaged for their own personal gain?
Re: UPS Pension Subsidy of NonUPSers
Too busy to know anybetter !
Bare foot and pregnant is what the union wants you to be so to speak.
Too busy to know anybetter !
J
JonFrum
Guest
So where has all the money gone? Two places: 1) The Trustees lost some of it in the market. 2) UPS willingly contributed some of it to the various funds on our behalf knowing we wouldn't qualify to receive it back in benefits because of the many company policies that are at odds with the various plan requirements necessary to have a career long enough to make it to the finish line and collect benefits for years thereafter.
1. Trustees lost a portion of it in the market downturn of 2000-2002. This loss effects each pension plan differently, depending on exactly how much money the plan had invested at the time, and how long they stayed invested as the market continued to fall. This sort of loss, unfortunately, can strike any plan, single-employer or multi-employer, as well as any other investment, like say, your own personal IRA and 401(k). Indeed, the Central States plan, which we hear so much about because it is so big and did so poorly, has been under the watchful eye of the federal government and a judge since 1982 as a result of a consent decree, and has been professionally invested by leading Wall Street firms. Go Figure. (You don't hear as much about the Western Conference fund, for example, which is even larger, actually made money during the downturn, and is (nearly?) 100% funded.) The current upturn in the stock market is probably improving the funding of all the plans, and the PBGC as well, but it will take awhile for that information to become generally known.
2. UPS, believe it or not, simply abandons some of the money it contributes, and does so knowingly, deliberately. The money contributed to the various pension funds by UPS is the result of the collective bargaining process. Teamsters negotiators and UPS negotiators, agree on an amount of money to be contributed on behalf of each bargaining unit member for each hour of work he/she performs. Here in New England, this includes part-timers and full-timers alike. Every paid hour counts: sick days, holidays, vacation days etc., (even overtime) but never more than 40 hours per week total. This is spelled out in Article 69 of the New England Supplement. The hourly contribution rate currently is $5.06 and is scheduled to increase 20 cents per hour on 8-1-07 to $5.26. That's $202.40 per week currently, and then $210.40 per week later, for each 40-hour-a-week employee, or $10,524.80 per year now and $10,940.80 per year effective Aug. 1, 2007. When UPS agrees to their Final Offer, (or Final, Final Offer, or Final, Final, Final this-time-we-really-mean-it Offer) or any offer that is then put to a vote of bargaining unit members, they are agreeing to the entire contract as negotiated, worts and all, just as those Teamsters who vote "Yes" are as well. If a sufficient number of Teamsters vote "Yes" the proposed contract becomes Law and binds all three sides, UPS, the IBT, and the members, all of them, even those who voted "No" as well as those who didn't vote at all. Even all those New Hires who won't even be hired until sometime during the (currently six year) course of the contract term are bound. They agree by applying for work at UPS. Everyone is bound and is assumed by The Law to be knowledgable about all revelant matters such as the details of the contribution rules, and the plan requirements that one must meet to qualify for the various levels of pension benefit, as well as all pension plan documents and decisions past and future. The Law is not there to protect the little guy.
The money contributed is not UPS' money once contributed. It's money in lieu of wages. UPS management and Teamsters bargaining unit members both earn revenue for the corporation by doing ther respective work. The fruits of their labor are divided up as agreed upon during negotiations between labor and management. The total dollar amount earmarked for labor is further divided between pay and benefits. Monies UPS contributes to the various funds is like the monies UPS contributes to the various banking acounts of those of us who have payroll Direct Deposit. The money isn't UPS' although UPS Payroll does have initial possession of it. Once transfered into the fund accounts, it is clearly no longer UPS' property. It is inappropriate for UPS to talk as if "they" voluntarily made a donation, like with a charity, or that they still "own" the money, when they were required by contract to make the payments, and knew exactly what they were doing. It is money they owe and is collectible in court as such. UPS has as little right to complain about how the money is spent as they do about how their payroll is spent once it has been paid out to the individual members in the form of paychecks. It is not the Teamsters money either. And it isn't even the member's money on whose behalf it was contributed. Although it may ultimately be the individual Teamsters' money if he manages to beat the odds at UPS and accumulate enough Pension Credits to qualify for a vested future pension benefit. Technically, it is the property of The Trust to which it was voluntarily contributed, and The Law assumes all parties are agreed on this. Ups has been delivering money by the truckloads to Teamsters-sponsored funds for half a century. The 2005 Annual Financial Report of UPS (see Note 5, Employee Benefit Plans) says UPS has contributed $1.289, $1.163, and $1.066 billion during 2005, 2004, and 2003, respectively.
UPS - Investor Relations
The exact details of the rules of contribution and the rules by which one earns Pension Credits vary from fund to fund so I'll use the New England rules to illustrate how UPS throws our money away. Every time UPS allows a member to quit or get fired before he reaches vesting status, (currently five years, formerly ten(!!!) years), all of the monies contributed on his behalf are forfeited to the fund. If the individual doesn't quickly go to work for another contributing employer and continue on to achieve vesting status, the money is assumed to be abandoned, like when a sports fan buys several years of season tickets, that clearly state "absolutely no refunds," and never shows up for any of the games.
Everyone who is vested is entitled to a pension, but it may not be much, and you may have to wait decades to begin collecting. You build Pension Credits by working as many hours as possible in a year up to a maximum of 1800. Any hours from 1801 through 2080, still require contributions, but don't earn you any Pension Credit. 1800 hours is about 45 weeks of 40 hours each. 2080 is the maximum number of hours of contributions per year. So any work in excess of a full forty five weeks, triggers contributions that are a gift to the fund. Almost all full-timers, and even some part-timers, are making significant gifts to the funds.
Anyone can easily run afoul of the contribution rules. For example, a person who works 40 hours in one week and again in the next, will get 80 hours credit. But if he worked 30 hours in the first week, but made up for it by working ten hours overtime in the second (50 hours), he would only get 70 hours credit, not eighty. Remember you can never get more than 40 hours credit per week. In addition, his entire two weeks may be a gift if he would otherwise have the maximum 1800 hours from his other 45 weeks of 40 hour pay.
Pension Credits are earned in monthly increments which is especially relevant to part-timers who would rarely get a full 12 month's (one year) Pension Credit, as well as full-timers in their first and last years of employment, or during any year they had to take a leave of absence. The idea is to always reach the next monthly milestone, and then the next, and so on. If a part-timer has his hours limited for any number of reasons by the company, he will probably fail to get credit for a month or more during that year. Imagine the difference between getting even one additional month of Pension Credit each year, for say 36 years. That's three additional years of work required, or else settle for a coresponding reduction in benefit level. Many part-timers could easily get one, two or more extra months per year if the company would only assign the work with pension credits in mind. (Abiding by seniority too, of course.) Pension hours are figured to the nearest quarter hour so punching out either voluntarily, or as instructed, just eight minutes too soon could cost you a whole month of pension credit if you were on the verge of moving up to the next level. Imagine how many more people could qualify for higher pension benefit levels if the company or the union taught them the rules and, if the employees and their supervisiors had the flexibility to lengthen the work day if it ment boosting the employee into a higher level, (or even shortening a workday, with mutual consent, if the final minutes or hours were a gift.) UPS could easily combine work to make full-time jobs, and to give existing part-time jobs more hours. UPS' policy of maintaining a majority part-time workforce wreaks havoc with our efforts to accumulate Pension Credits and is largely unnecessary. Few other companies claim to need this special exemption from the normal world of 40-hour a week business. Even full-timers who started out as part-timers have problems because their careers start on a slow track and their bodies may give out or they may quit before reaching the finish line.
Continued below . . .
1. Trustees lost a portion of it in the market downturn of 2000-2002. This loss effects each pension plan differently, depending on exactly how much money the plan had invested at the time, and how long they stayed invested as the market continued to fall. This sort of loss, unfortunately, can strike any plan, single-employer or multi-employer, as well as any other investment, like say, your own personal IRA and 401(k). Indeed, the Central States plan, which we hear so much about because it is so big and did so poorly, has been under the watchful eye of the federal government and a judge since 1982 as a result of a consent decree, and has been professionally invested by leading Wall Street firms. Go Figure. (You don't hear as much about the Western Conference fund, for example, which is even larger, actually made money during the downturn, and is (nearly?) 100% funded.) The current upturn in the stock market is probably improving the funding of all the plans, and the PBGC as well, but it will take awhile for that information to become generally known.
2. UPS, believe it or not, simply abandons some of the money it contributes, and does so knowingly, deliberately. The money contributed to the various pension funds by UPS is the result of the collective bargaining process. Teamsters negotiators and UPS negotiators, agree on an amount of money to be contributed on behalf of each bargaining unit member for each hour of work he/she performs. Here in New England, this includes part-timers and full-timers alike. Every paid hour counts: sick days, holidays, vacation days etc., (even overtime) but never more than 40 hours per week total. This is spelled out in Article 69 of the New England Supplement. The hourly contribution rate currently is $5.06 and is scheduled to increase 20 cents per hour on 8-1-07 to $5.26. That's $202.40 per week currently, and then $210.40 per week later, for each 40-hour-a-week employee, or $10,524.80 per year now and $10,940.80 per year effective Aug. 1, 2007. When UPS agrees to their Final Offer, (or Final, Final Offer, or Final, Final, Final this-time-we-really-mean-it Offer) or any offer that is then put to a vote of bargaining unit members, they are agreeing to the entire contract as negotiated, worts and all, just as those Teamsters who vote "Yes" are as well. If a sufficient number of Teamsters vote "Yes" the proposed contract becomes Law and binds all three sides, UPS, the IBT, and the members, all of them, even those who voted "No" as well as those who didn't vote at all. Even all those New Hires who won't even be hired until sometime during the (currently six year) course of the contract term are bound. They agree by applying for work at UPS. Everyone is bound and is assumed by The Law to be knowledgable about all revelant matters such as the details of the contribution rules, and the plan requirements that one must meet to qualify for the various levels of pension benefit, as well as all pension plan documents and decisions past and future. The Law is not there to protect the little guy.
The money contributed is not UPS' money once contributed. It's money in lieu of wages. UPS management and Teamsters bargaining unit members both earn revenue for the corporation by doing ther respective work. The fruits of their labor are divided up as agreed upon during negotiations between labor and management. The total dollar amount earmarked for labor is further divided between pay and benefits. Monies UPS contributes to the various funds is like the monies UPS contributes to the various banking acounts of those of us who have payroll Direct Deposit. The money isn't UPS' although UPS Payroll does have initial possession of it. Once transfered into the fund accounts, it is clearly no longer UPS' property. It is inappropriate for UPS to talk as if "they" voluntarily made a donation, like with a charity, or that they still "own" the money, when they were required by contract to make the payments, and knew exactly what they were doing. It is money they owe and is collectible in court as such. UPS has as little right to complain about how the money is spent as they do about how their payroll is spent once it has been paid out to the individual members in the form of paychecks. It is not the Teamsters money either. And it isn't even the member's money on whose behalf it was contributed. Although it may ultimately be the individual Teamsters' money if he manages to beat the odds at UPS and accumulate enough Pension Credits to qualify for a vested future pension benefit. Technically, it is the property of The Trust to which it was voluntarily contributed, and The Law assumes all parties are agreed on this. Ups has been delivering money by the truckloads to Teamsters-sponsored funds for half a century. The 2005 Annual Financial Report of UPS (see Note 5, Employee Benefit Plans) says UPS has contributed $1.289, $1.163, and $1.066 billion during 2005, 2004, and 2003, respectively.
UPS - Investor Relations
The exact details of the rules of contribution and the rules by which one earns Pension Credits vary from fund to fund so I'll use the New England rules to illustrate how UPS throws our money away. Every time UPS allows a member to quit or get fired before he reaches vesting status, (currently five years, formerly ten(!!!) years), all of the monies contributed on his behalf are forfeited to the fund. If the individual doesn't quickly go to work for another contributing employer and continue on to achieve vesting status, the money is assumed to be abandoned, like when a sports fan buys several years of season tickets, that clearly state "absolutely no refunds," and never shows up for any of the games.
Everyone who is vested is entitled to a pension, but it may not be much, and you may have to wait decades to begin collecting. You build Pension Credits by working as many hours as possible in a year up to a maximum of 1800. Any hours from 1801 through 2080, still require contributions, but don't earn you any Pension Credit. 1800 hours is about 45 weeks of 40 hours each. 2080 is the maximum number of hours of contributions per year. So any work in excess of a full forty five weeks, triggers contributions that are a gift to the fund. Almost all full-timers, and even some part-timers, are making significant gifts to the funds.
Anyone can easily run afoul of the contribution rules. For example, a person who works 40 hours in one week and again in the next, will get 80 hours credit. But if he worked 30 hours in the first week, but made up for it by working ten hours overtime in the second (50 hours), he would only get 70 hours credit, not eighty. Remember you can never get more than 40 hours credit per week. In addition, his entire two weeks may be a gift if he would otherwise have the maximum 1800 hours from his other 45 weeks of 40 hour pay.
Pension Credits are earned in monthly increments which is especially relevant to part-timers who would rarely get a full 12 month's (one year) Pension Credit, as well as full-timers in their first and last years of employment, or during any year they had to take a leave of absence. The idea is to always reach the next monthly milestone, and then the next, and so on. If a part-timer has his hours limited for any number of reasons by the company, he will probably fail to get credit for a month or more during that year. Imagine the difference between getting even one additional month of Pension Credit each year, for say 36 years. That's three additional years of work required, or else settle for a coresponding reduction in benefit level. Many part-timers could easily get one, two or more extra months per year if the company would only assign the work with pension credits in mind. (Abiding by seniority too, of course.) Pension hours are figured to the nearest quarter hour so punching out either voluntarily, or as instructed, just eight minutes too soon could cost you a whole month of pension credit if you were on the verge of moving up to the next level. Imagine how many more people could qualify for higher pension benefit levels if the company or the union taught them the rules and, if the employees and their supervisiors had the flexibility to lengthen the work day if it ment boosting the employee into a higher level, (or even shortening a workday, with mutual consent, if the final minutes or hours were a gift.) UPS could easily combine work to make full-time jobs, and to give existing part-time jobs more hours. UPS' policy of maintaining a majority part-time workforce wreaks havoc with our efforts to accumulate Pension Credits and is largely unnecessary. Few other companies claim to need this special exemption from the normal world of 40-hour a week business. Even full-timers who started out as part-timers have problems because their careers start on a slow track and their bodies may give out or they may quit before reaching the finish line.
Continued below . . .
J
JonFrum
Guest
. . . Continued . . .
If your pension plan doesn't allow you to "self-contribute" then you can't make up any shortfall in your annual Pension Credit account. If say, you are one hour short of 1800 hours, then you only get 11 months credit. Tough. Remember, it's very hard to put in long years at UPS so anything that extends your career is a severe burden, and one that most people will deal with by retireing early and never get that full pension. To take an almost rediculous example to dramitize the point: A part-timer who works only the contractually guaranteed minimum 3.5 hours per day, (air drivers have only a 3 hour guarantee!), would get only 6 months Pension Credit per year and have to work 60 calender years to earn a 30 year full-time pension. Imagine if UPSers were allowed to double shift whenever work was available. Imagine if they were encouraged to air drive on Saturdays. Imagine if they were allowed all along to be driver's helpers during peak, as they have recently been only in recent years. Imagine if the entire contract was obeyed by UPS, and enforced by the Teamsters. Imagine if the rules were changed to allow additional Pension Credit accumulation beyond 40 hours per week or beyond 1800 hours per year. These and other rules could be changed if only UPS and the members insisted on it. Check the fine print of your plan. The New England Plan allows certain "special" workers to earn up to two-and-a-half years of Pension Credit per calender year!!! Yes, you read that correctly. (See Table 1B of the Rules & Regulations.) Isn't that exactly what UPSers need: the ability to earn credits as rapidly as possible to compensate for the excessive wear and tear on our bodies?
plan documents
UPS makes every effort to hire people in school knowing many will not spend their entire career in a UPS-Teamsters job, probably not even in Teamsters jobs. UPS hires mostly males, knowing that males have died about seven years earlier than females. This mortality gap is narrowing, but it accounts for a portion of UPS funds that are abandoned due to the death of the potential recipient. UPS makes every effort to hire the very young. These people have a very long way to go to reach Normal Retirement Age of 64 or 65. Alot can happen between now and then, to cause them to forfeit some or all of their pension contributions. UPS assigns work initially, and transfers work as well, to less senior workers in a variety of ways that insure that the employee less likely to stay a long time at UPS gets the hours towards the accumulation of Pension Credits. Assigning or transfering work to a Preload shift instead of a Local Sort shift, for example, will increase the likelyhood that the pension contributions will be abandoned in the fund as the Preload worker is more likely to quit, or quit sooner. UPS assigns work to supervisors that should be given to bargaining unit members who need the hours to build their Pension Credit account.
If UPS fires a vested member, or drives him to "quit voluntarily," they often could have decided to handle the case differently. When they force someone out, they often force him to "retire" as well. If he doesn't get another job in another company covered by the fund, his retirement is calculated based on the Pension Credits he has now, and his current age. He will have to settle for a reduced pension amount, and probably have to wait years to begin collecting it. The frozen amount will be eaten by inflation in the meantime.
UPS, the Teamsters, and the members could insist that the pension fund trustees change their many policies to better suit UPS employees (and other employees as well.) Plans could require fewer hours to qualify for the various benchmarks. Contracts could require longer pension contribution coverage during sickness and injury, and a less onerous working environment and workload that causes almost everyone, labor and management alike, to throw in the towel prematurely. Pension funds are back-end loaded: you earn a greater percentage of your benefit the further into your career at UPS you go. For every 10,000 new hires, how many are still working at five years (vested), at 10, 15, 20, 25, 30, 35, and beyond? That's not just a retorical question. I really want to know. What percentage of New Hires actually make it to the finish line? How many even make seniority?
The inability of UPS to hire and keep people means a revolving door policy that, in effect, keeps the lower ranks of the employment roster non-union and temporary. Many people are hired just during free periods to cover vacations or during Peak. Some are hired knowing they are just here until they graduate. The rediculously low part-time starting wages and subsequent slow five year wage progression almost guarantees few will stay on as part-timers. Even transfering to management is a form of "quiting" the Teamsters-sponsored pension plan, although I don't know how the management plan may handle this.
It's bad enough that UPS knowingly contributes on our behalf to plans with such mismatched features that are just not attuned to our situation at UPS, but it is unseemly when they complain that their voluntarily abandoned money is subsidizing others. If you abandon money, you forfeit not only the money, but also any say in it's future use. It's strange to see UPS try so hard in puting competitors out of business then complain that they (UPS) have to subsidize the defunct company's retirees. So why did UPS spend all those years in the same plan as it's competitors and not say a word until 1997? Most of the so called subsidy is to one degree or another money deliberately, knowingly, consciously, premeditately (are you getting my drift?) abandoned in the fund by UPS. It's like divorcing your spouse but still wanting to control who she dates. Understandable but not allowable. What hutspa for UPS to know so much about the detailed workings of these plans and yet to arrange its affairs and ours so as to forfeit so much of what has been contributed on our behalf. (The definitive example of hutspa is the child who kills his parents, then demands mercy from the court because he is an orphan.)
Why hasn't UPS informed UPSers of all aspects of the pension situation in a through way all along? Not just during the strike of '97, with a poorly crafted campaign of misinformation that was bound to fail. UPS is not restricted by labor law from commenting on pension matters, they just can't negotiate with us behind the Teamsters' back. Indeed, why aren't UPS people in the UPS-run plans, reaping the benefits of high rates of returns on investments, liberal retirement rules, no cuts, and dramatically higher benefit amounts right now and for all these past years? This includes non-bargaining unit employees, as well as some part-timers. What is UPS waiting for. They control these funds to a much greater degree than the multi-employer funds. They could have unilaterally implimented improvements years ago if it was so easy, if they really wanted to. Why did John McDevitt of UPS resort to an apples-to-oranges comparison of Teamsters-sponsored plans to UPS-only plans? He used actual historical data for his 30-year Teamsters plan example, so the Teamsters numbers were low because the UPS contribution rates were historically low. But his UPS plan example wasn't based on actual historical data from 30 years of the UPS-only plans. Instead he switches to a hypothetical future 30 years that is not held down by all those years of small UPS yearly contributions. Even at that, the higher UPS plan benefit is not that much higher, and its purchasing power would be reduced during the intervening 30 years of waiting. There is no way of knowing how difficult it would be to actually achieve the goal of a comfortable retirement because to evaluate a pension plan one must see the entire plan and understand how each and every one of its features will effect you. Remember the non-existant UPS Plan that the company tried to sell us during the '97 strike. No actual details were provided because the plan would only be created and negotiated after the contract was ratified, when most of the Union's bargaining power had evaporated. You would also have to survive at UPS until retirement, and the company would have to survive until then, and beyond.
And now the bad news: moving to a single-employer plan won't solve any of these problems because you will still be dealing with the same employer and its same retirement-hostile policies. In addition, any "excess" money in a UPS-only fund can be legally skimmed off by UPS, something not permitted in a multi-employer fund.
If your pension plan doesn't allow you to "self-contribute" then you can't make up any shortfall in your annual Pension Credit account. If say, you are one hour short of 1800 hours, then you only get 11 months credit. Tough. Remember, it's very hard to put in long years at UPS so anything that extends your career is a severe burden, and one that most people will deal with by retireing early and never get that full pension. To take an almost rediculous example to dramitize the point: A part-timer who works only the contractually guaranteed minimum 3.5 hours per day, (air drivers have only a 3 hour guarantee!), would get only 6 months Pension Credit per year and have to work 60 calender years to earn a 30 year full-time pension. Imagine if UPSers were allowed to double shift whenever work was available. Imagine if they were encouraged to air drive on Saturdays. Imagine if they were allowed all along to be driver's helpers during peak, as they have recently been only in recent years. Imagine if the entire contract was obeyed by UPS, and enforced by the Teamsters. Imagine if the rules were changed to allow additional Pension Credit accumulation beyond 40 hours per week or beyond 1800 hours per year. These and other rules could be changed if only UPS and the members insisted on it. Check the fine print of your plan. The New England Plan allows certain "special" workers to earn up to two-and-a-half years of Pension Credit per calender year!!! Yes, you read that correctly. (See Table 1B of the Rules & Regulations.) Isn't that exactly what UPSers need: the ability to earn credits as rapidly as possible to compensate for the excessive wear and tear on our bodies?
plan documents
UPS makes every effort to hire people in school knowing many will not spend their entire career in a UPS-Teamsters job, probably not even in Teamsters jobs. UPS hires mostly males, knowing that males have died about seven years earlier than females. This mortality gap is narrowing, but it accounts for a portion of UPS funds that are abandoned due to the death of the potential recipient. UPS makes every effort to hire the very young. These people have a very long way to go to reach Normal Retirement Age of 64 or 65. Alot can happen between now and then, to cause them to forfeit some or all of their pension contributions. UPS assigns work initially, and transfers work as well, to less senior workers in a variety of ways that insure that the employee less likely to stay a long time at UPS gets the hours towards the accumulation of Pension Credits. Assigning or transfering work to a Preload shift instead of a Local Sort shift, for example, will increase the likelyhood that the pension contributions will be abandoned in the fund as the Preload worker is more likely to quit, or quit sooner. UPS assigns work to supervisors that should be given to bargaining unit members who need the hours to build their Pension Credit account.
If UPS fires a vested member, or drives him to "quit voluntarily," they often could have decided to handle the case differently. When they force someone out, they often force him to "retire" as well. If he doesn't get another job in another company covered by the fund, his retirement is calculated based on the Pension Credits he has now, and his current age. He will have to settle for a reduced pension amount, and probably have to wait years to begin collecting it. The frozen amount will be eaten by inflation in the meantime.
UPS, the Teamsters, and the members could insist that the pension fund trustees change their many policies to better suit UPS employees (and other employees as well.) Plans could require fewer hours to qualify for the various benchmarks. Contracts could require longer pension contribution coverage during sickness and injury, and a less onerous working environment and workload that causes almost everyone, labor and management alike, to throw in the towel prematurely. Pension funds are back-end loaded: you earn a greater percentage of your benefit the further into your career at UPS you go. For every 10,000 new hires, how many are still working at five years (vested), at 10, 15, 20, 25, 30, 35, and beyond? That's not just a retorical question. I really want to know. What percentage of New Hires actually make it to the finish line? How many even make seniority?
The inability of UPS to hire and keep people means a revolving door policy that, in effect, keeps the lower ranks of the employment roster non-union and temporary. Many people are hired just during free periods to cover vacations or during Peak. Some are hired knowing they are just here until they graduate. The rediculously low part-time starting wages and subsequent slow five year wage progression almost guarantees few will stay on as part-timers. Even transfering to management is a form of "quiting" the Teamsters-sponsored pension plan, although I don't know how the management plan may handle this.
It's bad enough that UPS knowingly contributes on our behalf to plans with such mismatched features that are just not attuned to our situation at UPS, but it is unseemly when they complain that their voluntarily abandoned money is subsidizing others. If you abandon money, you forfeit not only the money, but also any say in it's future use. It's strange to see UPS try so hard in puting competitors out of business then complain that they (UPS) have to subsidize the defunct company's retirees. So why did UPS spend all those years in the same plan as it's competitors and not say a word until 1997? Most of the so called subsidy is to one degree or another money deliberately, knowingly, consciously, premeditately (are you getting my drift?) abandoned in the fund by UPS. It's like divorcing your spouse but still wanting to control who she dates. Understandable but not allowable. What hutspa for UPS to know so much about the detailed workings of these plans and yet to arrange its affairs and ours so as to forfeit so much of what has been contributed on our behalf. (The definitive example of hutspa is the child who kills his parents, then demands mercy from the court because he is an orphan.)
Why hasn't UPS informed UPSers of all aspects of the pension situation in a through way all along? Not just during the strike of '97, with a poorly crafted campaign of misinformation that was bound to fail. UPS is not restricted by labor law from commenting on pension matters, they just can't negotiate with us behind the Teamsters' back. Indeed, why aren't UPS people in the UPS-run plans, reaping the benefits of high rates of returns on investments, liberal retirement rules, no cuts, and dramatically higher benefit amounts right now and for all these past years? This includes non-bargaining unit employees, as well as some part-timers. What is UPS waiting for. They control these funds to a much greater degree than the multi-employer funds. They could have unilaterally implimented improvements years ago if it was so easy, if they really wanted to. Why did John McDevitt of UPS resort to an apples-to-oranges comparison of Teamsters-sponsored plans to UPS-only plans? He used actual historical data for his 30-year Teamsters plan example, so the Teamsters numbers were low because the UPS contribution rates were historically low. But his UPS plan example wasn't based on actual historical data from 30 years of the UPS-only plans. Instead he switches to a hypothetical future 30 years that is not held down by all those years of small UPS yearly contributions. Even at that, the higher UPS plan benefit is not that much higher, and its purchasing power would be reduced during the intervening 30 years of waiting. There is no way of knowing how difficult it would be to actually achieve the goal of a comfortable retirement because to evaluate a pension plan one must see the entire plan and understand how each and every one of its features will effect you. Remember the non-existant UPS Plan that the company tried to sell us during the '97 strike. No actual details were provided because the plan would only be created and negotiated after the contract was ratified, when most of the Union's bargaining power had evaporated. You would also have to survive at UPS until retirement, and the company would have to survive until then, and beyond.
And now the bad news: moving to a single-employer plan won't solve any of these problems because you will still be dealing with the same employer and its same retirement-hostile policies. In addition, any "excess" money in a UPS-only fund can be legally skimmed off by UPS, something not permitted in a multi-employer fund.
Coldworld
Well-Known Member
the start to fixing the pension problem for ups is to stop treating everyone like ****. Maybe then employees with side with the company on some of these difficult pension issues. I think many of the problems this company has comes from the pathetic treatment of employees, including management. Im not an angry employee, actually get along with my center team great, but overall, the company and employees have a poor relationship. Large changes like pension, volume growth, etc start with basic positive communications between workers and management. Does anyone agree??
wkmac
Well-Known Member
I agree coldworld. The basic foundation of any positive relationship is trust and you are correct. In our case it's not there and I think it goes both ways. Both cultures (management and union) thrive and grow on this seperation IMO and both sides are waiting for the other to bend over backwards and totally give in to the other before this is ever resolved. In either case, it will likely never happen until the company faces a huge crisis forcing both sides to work together an overcome the problem. A probable majority upper level management with those opposed held in line out of fear, a minority of both hardcore union with some fear factor amongst the hourly ranks and a minority worklevel management and the union hierarchy will be standing around pointing fingers and throwing blame for the crisis and doing nothing to fix it will also be very present. I do believe the larger majority of worklevel management and hourly will work together to overcome the crisis and thus building a working relationship as we work the problem and resolve it together. A big enough crisis will spread the upper ranking so thin that micro management will be impossible leaving many at the worklevel to their own so to speak and see the crisis, plot a solution and then enact and even adjust the plan as the need arises. That is whare you will find the success to overcome any problem but those folks will not beat their chests to claim glory but rather continue to work and make things better. In the meantime, you will have those that did nothing posturing to take the credit and use the attention and fame to advance their own careers and they will acend the corp, latter. However, once resolved will the errogant natures of both sides kick in full steam again and in the end we gained nothing in the respects of which you spoke?
I can't answer that but I'm a huge skeptic it that means anything. Regardless, good points in your post and I'm sure there are a lot of worklevel management who would agree and appreciate your comments!
JMO
J
JonFrum
Guest
I'm reading reports that the UPS mechanic's pension plan is offering them a monthly retirement of $10,000 or so, which makes the Teamsters' monthly retirement checks look very poor in comparison. The UPS mechanics are Teamsters in some areas of the country, and IAM members elsewhere. Those who are members of the International Association of Machinists and Aerospace Workers (IAM) have their own nationwide pension plan called The IAM National Pension Plan. It's true the IAM plan (overfunded at 124% !!!) is better than say the Central States or New England plans ( underfunded at 58% and 57%), but it's not as good as the $10,000 figure would suggest. First, IAM members seem to contribute more per hour into their fund so obviously one would expect a higher benefit on that basis alone. This may vary from Lodge to Lodge. (We have Locals, they have Lodges, go figure.)
Note how the contribution rate table goes up to $10 per hour, and how IAM members' benefit accruals are higher for the same contribution rate than ours.
The fund appears to be doing well but read the Summary of Material Modifications . . .
https://web.archive.org/web/20050316111645/http://www.iamnpf.org/npf/forms/smm_2003.pdf
to learn the bad news. This 8-page document reveals that the plan has been recently amended:
1.) No longer will Past Service Credit be granted.
2.) Future employers and their employees who join the plan after April 1, 2003 will only get 60% of the retirement amounts that current (grandfarthered) employee groups get!!! That's a 40% cut, and it also applies to any present member who goes to work in the future for one of the new employers.
Also, note that the $10,000 figure is a projection based on the assumption that the member will continue to work as an Active and have contributions made on his behalf into the fund until he is age 62, or age 65. Thus, someone with, say, 15 or 20 or 25 years currently, who was once a 17- or 21-year-old New Hire, is assumed to continue working until 62 or even 65, for a career lasting up to 48 years. Naturally, any pension fund could promise you a huge pension if you are willing to work that long. But few people are. And even if you are, UPS may well get the better of you before you reach the finish line. You don't see many UPSers in their 60's now do you?
It's a good sign that people are at least comparing apples to apples when they compare the various Teamsters plans to the IAM plan. (Of course, they always pick the worst of the Teamsters plans to use in the comparison.) At least the Teamsters plan is being compared to a plan that actually exists, with an actual track record, and an actual website with lots of information. But even so, be careful comparing the individual annual statements of a Teamsters plan member to an IAM plan member. My personal statement tells me what I'll get at age 64 if I quit work today, or get pushed out, and wait as an Inactive until 64, when I start to collect. (I could retire as early as age 55, but the age 64 amount would be reduced proportionatly.) The IAM personal statement Projected Benefit Amount assumes a comparable person will continue as an Active right up to the bitter end -- age 62 or 65 -- with all those additional years of additional plan contributions and investment returns adding to the final benefit amount. If you instead look elsewhere on the IAM statement, you will see that the benefit amount promised to an IAM plan member who quits work today and waits as an Inactive until 65, (or takes a reduced Early Retirement) is somewhat larger than the Teamster amount but nowhere near $10,000. My current 25 years of Pension Credit will get me about $3,700 at age 64; an IAM mechanic's statement I saw, with 20 years service would get about $3,900 at age 65. The IAM plan has an Unreduced Pension at age 62 if you have 20 years service. Another plus for the IAM.
Then there's the Local 804 I.B.T. and Local 447 IAM UPS Multi-employer Retirement Plan which is smaller and underfunded at 59% according to Moody's 16 page analysis of major pension plans. . .
Note how the contribution rate table goes up to $10 per hour, and how IAM members' benefit accruals are higher for the same contribution rate than ours.
The fund appears to be doing well but read the Summary of Material Modifications . . .
https://web.archive.org/web/20050316111645/http://www.iamnpf.org/npf/forms/smm_2003.pdf
to learn the bad news. This 8-page document reveals that the plan has been recently amended:
1.) No longer will Past Service Credit be granted.
2.) Future employers and their employees who join the plan after April 1, 2003 will only get 60% of the retirement amounts that current (grandfarthered) employee groups get!!! That's a 40% cut, and it also applies to any present member who goes to work in the future for one of the new employers.
Also, note that the $10,000 figure is a projection based on the assumption that the member will continue to work as an Active and have contributions made on his behalf into the fund until he is age 62, or age 65. Thus, someone with, say, 15 or 20 or 25 years currently, who was once a 17- or 21-year-old New Hire, is assumed to continue working until 62 or even 65, for a career lasting up to 48 years. Naturally, any pension fund could promise you a huge pension if you are willing to work that long. But few people are. And even if you are, UPS may well get the better of you before you reach the finish line. You don't see many UPSers in their 60's now do you?
It's a good sign that people are at least comparing apples to apples when they compare the various Teamsters plans to the IAM plan. (Of course, they always pick the worst of the Teamsters plans to use in the comparison.) At least the Teamsters plan is being compared to a plan that actually exists, with an actual track record, and an actual website with lots of information. But even so, be careful comparing the individual annual statements of a Teamsters plan member to an IAM plan member. My personal statement tells me what I'll get at age 64 if I quit work today, or get pushed out, and wait as an Inactive until 64, when I start to collect. (I could retire as early as age 55, but the age 64 amount would be reduced proportionatly.) The IAM personal statement Projected Benefit Amount assumes a comparable person will continue as an Active right up to the bitter end -- age 62 or 65 -- with all those additional years of additional plan contributions and investment returns adding to the final benefit amount. If you instead look elsewhere on the IAM statement, you will see that the benefit amount promised to an IAM plan member who quits work today and waits as an Inactive until 65, (or takes a reduced Early Retirement) is somewhat larger than the Teamster amount but nowhere near $10,000. My current 25 years of Pension Credit will get me about $3,700 at age 64; an IAM mechanic's statement I saw, with 20 years service would get about $3,900 at age 65. The IAM plan has an Unreduced Pension at age 62 if you have 20 years service. Another plus for the IAM.
Then there's the Local 804 I.B.T. and Local 447 IAM UPS Multi-employer Retirement Plan which is smaller and underfunded at 59% according to Moody's 16 page analysis of major pension plans. . .
From what you report MR.Frum the teamster plan has only gotten worse over the years and if I could look into the future would have to say it will only get worse.You have put the differrence up between the differrent pensions now MR. Frum tell us what you would do to get the best for your buck?Tell how the mess can be fixed?Don't tell us who has the better pension we already know.tell us why the pensions we have are under funded?Also don't hide tell us who you are and who you represent?
mr frum, IAm members do have more put to their fund for pensions, you are right on that. Now do you have any clue as to how much? Running the figures they will have a little over $800 put in over 30 years! yes that is more but not a difference of over $7,000 in 30 years time.
UPSStory
New Member
In regards to your original request about information stating that UPS subsidizes Non-UPS pensions
The following quote was taken from this document...
"The Central States plan currently pays approximately $1
billion annually to 100,000 retirees that lack a contributing employer. Those benefits
consume nearly 100 percent of the annual contributions received by the plan from all the
remaining employers. Contributing employers can no longer shoulder this entire burden
which is mounting each year."
I think this sums it up pretty well...
The following quote was taken from this document...
"The Central States plan currently pays approximately $1
billion annually to 100,000 retirees that lack a contributing employer. Those benefits
consume nearly 100 percent of the annual contributions received by the plan from all the
remaining employers. Contributing employers can no longer shoulder this entire burden
which is mounting each year."
I think this sums it up pretty well...
wkmac
Well-Known Member
Checkout page 2, paragraph 6 which states that UPS/Teamsters want to impose penalities on employers who use independent and 3rd party contractors in their business operations. Am I reading this right? Is he saying UPS in league with the IBT wants to sanction other employers who in the course of their business opt to use IC's or 3rd party avenues to meet customer needs and demands? You mean UPS, the IC King? Well! Well! Well! Talk about the pot calling the kettle black!
This document is a good read IMO and the worth the time for any UPS/IBT member especially one covered by Central States. In reading this company President's testimony I came away thinking 2 things. One, that UPS has taken a position in this mess of using it's 800 lb. gorilla status of drafting rules that in effect would force other companies to either pay up to the point of allowing UPS a soft landing or (2) the better prospect that in their attempt to withdraw and protect their business, the sanctions themselves would kill the business itself and thus clear the playing field of competition and UPS moves in to scoff up the gravy! The last paragraph on page 1 and concluding on page 2 sure seem to suggest this very thing!
Either way, it sure looks like UPS and the IBT are in league together and both would benefit in either case.
And to JonFrum,
Hey man, girl, dude or whatever pertaining to gender, excellent links to the IAM pension situtation. Nice job.
It amazes me that so many IBT blinded loyalist can sit there and extoll the higher virtues of the IBT and it's heavenly mission to save us from the demon employers all the while knowing full good and well what others like the IAM are doing for it's members. Surely, if the IAM can in some formula get $10k per month for it's retirees, then it is possible for another union to set up a plan that pays out $7k per month to it's retirees. We however, the blessed of the IBT/CS heavenly alliance are lucky to get $3k per month if we survive the whole process to age 62.
We are the union....
The mighty, mighty union!
Yeah
right!!!!!!!!I'm starting a new version.
We are the
....The hard, hard
....And we're to stupid to stand up, pull up our pants and not take it anymore!
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Trying hard not to join this crying party, but should we be considering that all these underfunded teamsters pension and health and welfare funds are actually doing something about turning this thing around. Of course we have been lied to for political reasons, locally and with the international and it isn't just a Hoffa thing either. If the truth be known the trustees of these plans have seen this coming ten or fifteen years ago, hence the strike in "97" to create more contributing members to these funds.
Consider now that these retirees who are currently collecting retirement benefits will not be with us much longer. There is a thing called actuary information that calculates how long they have to pay till we buy the farm. Is it a possible that with this timetable that the funds will turn the corner over the next 10 years and start to become stable. With the contributions that UPS will have to place with it's new participants in these plans and the elimination of the non contributing defunct pensioners through attrition would it not be slowly become a basically all UPS/teamster run plan anyway.
With the pension reform act starting in "08" with it's increased federal pension insurance and automatic five percent increase for benefit plans in the red line provision will also come into effect. My personal belief is that is why the company and the union are starting early to work out an agreement before this comes into play. People also consider that most of us under the central states funds started out orginally under the company benefit programs, the UPS pension fund for part timers. Guessing that over three quarters of the current participants in the central states funds have been vested with over five years under the companys' pension fund. If that company plans' benefits were increased to even the 55 dollar per vested year that the current part time pension benefit pays for every year vested for all the full time participants currently in the central states plans it would help considerably with the underfunding ratio. Those who have checked into this have found out this is not happening, the benefit paid is based on when you left the plan, on a percentage of the 30 year benefit and reduced six percent till age 65. Basically you are getting peanuts for any early retirement.
Are we being lied to again with the international's apparent concern over the lack of any possibility of any early retirement? Hard to say, it sure would benefit the trustees of these funds to keep us contributing till 65...Hell, with the saving in paying health coverages for early retirees would be incentive enough. For those who do not know at age 65 medicare or medicad kicks in and for the most part we are dropped from most health and welfare packages, union or company. With the blame game going on, it would be easy to blame any decreases in benefits on the pension reform act. Bottom line is that I am really sick of being lied to by everybody involved with this pension crisis, it should not be this hard to get correct information.
Consider now that these retirees who are currently collecting retirement benefits will not be with us much longer. There is a thing called actuary information that calculates how long they have to pay till we buy the farm. Is it a possible that with this timetable that the funds will turn the corner over the next 10 years and start to become stable. With the contributions that UPS will have to place with it's new participants in these plans and the elimination of the non contributing defunct pensioners through attrition would it not be slowly become a basically all UPS/teamster run plan anyway.
With the pension reform act starting in "08" with it's increased federal pension insurance and automatic five percent increase for benefit plans in the red line provision will also come into effect. My personal belief is that is why the company and the union are starting early to work out an agreement before this comes into play. People also consider that most of us under the central states funds started out orginally under the company benefit programs, the UPS pension fund for part timers. Guessing that over three quarters of the current participants in the central states funds have been vested with over five years under the companys' pension fund. If that company plans' benefits were increased to even the 55 dollar per vested year that the current part time pension benefit pays for every year vested for all the full time participants currently in the central states plans it would help considerably with the underfunding ratio. Those who have checked into this have found out this is not happening, the benefit paid is based on when you left the plan, on a percentage of the 30 year benefit and reduced six percent till age 65. Basically you are getting peanuts for any early retirement.
Are we being lied to again with the international's apparent concern over the lack of any possibility of any early retirement? Hard to say, it sure would benefit the trustees of these funds to keep us contributing till 65...Hell, with the saving in paying health coverages for early retirees would be incentive enough. For those who do not know at age 65 medicare or medicad kicks in and for the most part we are dropped from most health and welfare packages, union or company. With the blame game going on, it would be easy to blame any decreases in benefits on the pension reform act. Bottom line is that I am really sick of being lied to by everybody involved with this pension crisis, it should not be this hard to get correct information.
