As much as it kills me I agree with you here. I love my defined benefit plan but I see the reality of the times. If ABF put the $12,000 per year into a 401K in my name and I could add to it at a rate that worked for me it could be a good thing. No unfunded liability for ABF and $240,000 plus growth after 20 years would be fine with me.
BUT a 401K with my contributions being the primary contribution and a secondary of up to say, $3000 by my employer... not good enough.
Most of that $12,000 per contribution goes to pay currently retired teamsters. In the scenario of a pension withdrawl, two seperate and distinct columns will have to be established. One column is for the individual to reap the benefits of his labor by establishing his own individual retirement account whereby he manages how it is invested by choosing the appropriate risk vehicle like stocks, bonds, or securities. Secondly, we as teamsters must recognize the solidarity we have of those teamsters currently retired. The math is complex considering the current assets of the pension and future benefits we will have to make for this second column. Additionally, those that have contributed for a number of years but are still a long way from retirement. I will relate something close to what I have in mind, but claim having no real insight to exact numbers. I have 10 years paid into the pension, last time I checked, my retirement benefit was around $1200 at age 65. As you mentioned, ABF paid around $12000 into the pension in my name in 2011.
So lets say ABF continues with our normal wage progression tied closely to cost of living adjustments. Meaning we don't do the YRC giveback on wages. But the retirement portion of our contract is limited to say $10000 per individual. This will represent a cost savings of $2000 per employee. However, since they are having the added benefit of losing the contingent liability of the pension, (which I estimate to be around $1Billion plus or minus a few hundred million) they will be getting a second significant benefit from getting out from the liability. They have to establish a fund that pays yearly in real money, not company stock to those currently retired. If the next contract goes 5 years, I would estimate ABF will have contributed close to 100 million to said fund, and once the 5 year contract ends, so do the contributions from ABF to this teamster fund but they continue to make at least the $10000 yearly contribution for current employees.
The information above is the framework for a deal to get done. The following is what can be adjusted either up or down to make certain everyone comes out as fair as possible. Using the $10000 cap, 50% goes to the individuals own account, the other 50% to the teamster fund for the length of the contract with the understanding, that when the contract ends, so does the contributions from us for the teamster column. Secondly, come up with a workable solution that gives us who have paid in for a number of years but agree to a significantly reduced pension. In my instance, eventhough my future benefit is suppose to be $1200, I would take much less if you allow me the time to make up the difference. Since I have over 20 years to retire, a figure like $500 is not unreasonable. Now if I was closer to retirement, (less time to make up the difference) that figure would not be so low, maybe $850. Even the currently retired teamsters would recieve some sort of haircut. I would speculate on an exact figure, but no less than a 10% cut.
It is important to realize this entire idea operates with the philosophy that we as teamsters realize a haircut must be made by everyone i.e., current employees, those retired and in turn, the company will survive longterm. If you look at the situation and think ABF will survive no matter if a deal is struck regarding its pension obligation and therefore crazy to entertain such conversations please state your reasons why you think they will not go the way of every other union LTL. Meaning provide you logic and reasoning.
In my opinion, I would rather control my pension, if I had the option, rather than it being tied up in a volitale pension fund. I hope we eventually get some reasonable options to look at.
