CFer,
In reply to your original question:
The current PARCEL RETIREMENT situation:
I give you this because should you go with IBT this is what you should expect:
As a standard, pension funds provide health insurance up to age 62 when Medicare takes over. Central States offers retirees below that age a monthly premium of
$1240 which gives them no vision, no dental and a LIFETIME max of $150,000. If you use that up before medicare, then you're SOL. E**** said he priced a premium through his personal insurance company which was re-selling BCBS at a monthly rate of around $625/month and would give a lifetime max of $1million and better coverage. I suggest you go to the BCBS website or even several insurance websites and quote yourself to get an idea of what the market is offering currently. Central States is providing such poor insurance because they have to
reallocate health insurance money to the pension fund to keep it solvent. Meanwhile, Fred G*****, CS fund manager, will receive premium health insurance for life as well as a $1million pension payout when he retires.
APWA's proposals reflect the unstrained financial position that they will enjoy when UPS pension/health insurance money will provide benefits to
UPS employees only.
APWA is capable of offering the retirement premium of $300/month to those under 62 for the following reasons:
- APWA will be purchasing insurance directly from the insurance companies.
- There is significant bargaining power when you approach an insurance company with the opportunity to land a policy covering 217,000 employees of an extremely solvent and profitable company such as UPS
- Herein lies the core answer to your question. The APWA pension has calculated into its payout plan and investment strategy the need to provide insurance coverage between the time you retire and the time Medicare kicks in. Thus, the $300 is not the actual amount of your total premium. This reflects the balance remaining after your pension has already paid its monthly portion. Once again, this is possible because your pension contributions pay only for your retirement benefits.
- The $300 amount reflects the premium you would pay until age 62 if you retired today. Reflecting rising healthcare costs, should the insurance premium increase tomorrow to $350 and you retire tomorrow, you would pay that amount until age 62. Prices would be fixed annually or biannually and would be renegotiated between APWA and the insurance provider at that time. The buying power that APWA would enjoy works to improve your insurance at the lowest possible rate. IBT does not take advantage of this buying power because it relies on its insurance plans to help finance the pension fund deficiencies.
The current FREIGHT retirement situation:
Should you choose to go with IBT, expect something very similar to the above examples. The insurance benefits that IBT plans are offering are being sacrificed to maintain the pension funding levels. It is a sinking ship.
APWA insurance benefits for the Blue side retirees are identical to the Parcel benefits. This would likely result in an improvement in health insurance upon retirement when compared to the coverage you carry as an active employee. You can see the details of this coverage on the
APWA website.
The Active Employee situation:
Parcel employees do not pay for health insurance. This expense is covered in full by UPS and is a part of the contract with IBT which stipulates that UPS must purchase insurance from the financially unstable Teamster plans. On average, UPS pays a premium of $975/month per employee.
APWA insurance plans are defined on their website. These benefits are possible as a result of
APWA using its buying power to find its members the best deal. When I priced a 56 yo couple for health insurance on BCBS, the ranges of premiums were from $200 to $1200. UPS's monthly contribution of $975 could easily purchase good coverage when applying the purchasing power the
APWA would have available.
Currently Freight employees pay around $250/month out of pocket on premiums.
APWA would negotiate to have the entire premium covered by UPS. In addition, they would seek to have your major medical coverage restored and the out-of-work rule reversed so that in the case of debilitating disease which precludes you from working, you will not lose your insurance.
APWA--Integrity. Honor. Justice.