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Critics complain delivery giant puts additional burden on other firms.
Sandra Presley, vice president of a local Teamsters retiree club, fears her pension benefits will be cut because of a law change backed by an odd coalition of unions, politicians in both parties and Sandy Springs-based UPS.
Presley’s pension comes from the Teamsters union’s huge Central States fund, one of the nation’s most under-funded multiemployer pensions. It has about $16 billion less cash than needed to pay the benefits it has promised. It’s likely to be among the first to take advantage of the law by cutting current retiree benefits.
“It’s going to hurt me terribly,” said Presley. “I’m living off that money. I’m living off every dime of it.”
“We worked all our lives to earn a decent pension,” said Waymon Stroud, 61, who retired four years ago from Yellow Freight and is now president of the retirees club at Teamsters Local 728 in Atlanta. If his $2,800-a-month benefit got cut 30 percent, he added, “I’d have to go back to work.”
When passed in December, the law included a provision putting UPS retirees last in line to absorb Central States’ likely benefit cuts, with “orphan” retirees from defunct companies first and those from other companies still in the plan next.
Critics say putting UPS at the back of the line means it likely will not have to pay out perhaps $2 billion to its retirees to cover benefit cuts — while retirees of other firms in the Central States plan will take bigger cuts.
Initially, the proposed law didn’t include the provisions. The UPS-friendly paragraphs showed up days before passage.
UPS would not talk about its lobbying effort. Records show it made a total of $163,848 in political contributions last year to 80 percent of the lawmakers on the House committee that handled the pension legislation.
The Teamsters union, which represents 253,000 UPS drivers and other workers, didn’t oppose the basic legislation but was not happy about the last-minute provision affecting UPS.
“UPS is attempting to escape a negotiated obligation the company agreed to when it withdrew from the Central States Pension Fund,” Teamsters President James P. Hoffa said a few days before the bill’s final passage. “This outrageous government bailout of one of the most profitable companies in America should be stopped in its tracks.”
UPS spokesman Steve Gaut defended the company’s original decision to pull out of the plan, as well as the protection offered by the new law.
“We were concerned about the declining economics of that (Central States) plan,” he said of the 2007 pullout. “Everybody thought it was the right thing to do at the time. We continue to think it’s the right thing to do.”
Gaut said other companies can use the same provisions UPS did, which encourage corporations to bolster workers’ retirement benefits.
But, he added, they will have to do what UPS did: pull their employees out of the old pension plan, pay off their outstanding obligations, guarantee the workers’ benefits from the old plan, and set up a new pension for their workers.
“It happens that we meet (those) criteria,” he said. “This promotes responsible behavior on the part of companies.”
If other companies follow that prescription it will kill the Central States plan, said Ken Paff, national organizer for Teamsters for a Democratic Union, a dissident union group that opposed the legislation. That would put additional pressure on the already weak insurance fund.
“It’s absolutely appalling,” he said, if more companies bail out of the pension plan. “What about all the companies that are in the fund right now, paying into the fund? Pension funds don’t want their biggest contributor to leave. (UPS) doesn’t get a gold star for that,” he said.
He and other critics complain that the pension plans’ rescue will come at the expense of the most vulnerable — retirees who in many cases are well beyond their working years.
Read the whole story at...
http://www.ajc.com/news/business/how-ups-benefits-from-law-eroding-pension-protecti/njr7Y/
Sandra Presley, vice president of a local Teamsters retiree club, fears her pension benefits will be cut because of a law change backed by an odd coalition of unions, politicians in both parties and Sandy Springs-based UPS.
Presley’s pension comes from the Teamsters union’s huge Central States fund, one of the nation’s most under-funded multiemployer pensions. It has about $16 billion less cash than needed to pay the benefits it has promised. It’s likely to be among the first to take advantage of the law by cutting current retiree benefits.
“It’s going to hurt me terribly,” said Presley. “I’m living off that money. I’m living off every dime of it.”
“We worked all our lives to earn a decent pension,” said Waymon Stroud, 61, who retired four years ago from Yellow Freight and is now president of the retirees club at Teamsters Local 728 in Atlanta. If his $2,800-a-month benefit got cut 30 percent, he added, “I’d have to go back to work.”
When passed in December, the law included a provision putting UPS retirees last in line to absorb Central States’ likely benefit cuts, with “orphan” retirees from defunct companies first and those from other companies still in the plan next.
Critics say putting UPS at the back of the line means it likely will not have to pay out perhaps $2 billion to its retirees to cover benefit cuts — while retirees of other firms in the Central States plan will take bigger cuts.
Initially, the proposed law didn’t include the provisions. The UPS-friendly paragraphs showed up days before passage.
UPS would not talk about its lobbying effort. Records show it made a total of $163,848 in political contributions last year to 80 percent of the lawmakers on the House committee that handled the pension legislation.
The Teamsters union, which represents 253,000 UPS drivers and other workers, didn’t oppose the basic legislation but was not happy about the last-minute provision affecting UPS.
“UPS is attempting to escape a negotiated obligation the company agreed to when it withdrew from the Central States Pension Fund,” Teamsters President James P. Hoffa said a few days before the bill’s final passage. “This outrageous government bailout of one of the most profitable companies in America should be stopped in its tracks.”
UPS spokesman Steve Gaut defended the company’s original decision to pull out of the plan, as well as the protection offered by the new law.
“We were concerned about the declining economics of that (Central States) plan,” he said of the 2007 pullout. “Everybody thought it was the right thing to do at the time. We continue to think it’s the right thing to do.”
Gaut said other companies can use the same provisions UPS did, which encourage corporations to bolster workers’ retirement benefits.
But, he added, they will have to do what UPS did: pull their employees out of the old pension plan, pay off their outstanding obligations, guarantee the workers’ benefits from the old plan, and set up a new pension for their workers.
“It happens that we meet (those) criteria,” he said. “This promotes responsible behavior on the part of companies.”
If other companies follow that prescription it will kill the Central States plan, said Ken Paff, national organizer for Teamsters for a Democratic Union, a dissident union group that opposed the legislation. That would put additional pressure on the already weak insurance fund.
“It’s absolutely appalling,” he said, if more companies bail out of the pension plan. “What about all the companies that are in the fund right now, paying into the fund? Pension funds don’t want their biggest contributor to leave. (UPS) doesn’t get a gold star for that,” he said.
He and other critics complain that the pension plans’ rescue will come at the expense of the most vulnerable — retirees who in many cases are well beyond their working years.
Read the whole story at...
http://www.ajc.com/news/business/how-ups-benefits-from-law-eroding-pension-protecti/njr7Y/
