When members hear that our Health Fund lost nearly $18 million or 55 percent of its assets from 2002 to 2007, the first thing they ask is: What happened to the money?

The first answer is Local 804 officials did not make sure there was enough money going into the plan. Healthcare costs are rising sharply. When we voted on the 2002 contract, we were promised that it included enough money to protect our pension and healthcare benefits. That proved not to be true.

But there is another answer to the question: What happened to the money? When our Health Fund was losing millions of dollars every year, our own Local 804 officers diverted millions of dollars from the Health Fund to the Pension Fund starting in Aug. 2005.

Click here to download the leaflet “What Happened to the Money?”

Starved for contributions, our Health Fund lost $11.4 million through May 31, 2007—the last time when official figures are available. The chart below shows how this happened.

Under our contract, UPS agrees to contribute a certain amount per hour to our Pension and Health Funds. The Local 804 negotiating committee and UPS then decide how much money per hour will go to the Pension Fund and how much to the Health Fund.

The chart below shows how much money UPS contributed to the Health Fund each month for every working participant. (UPS does not make contributions for retirees. They make their own monthly contribution.) The second column shows how much the contribution changed per hour from the previous year.

The second chart shows how much money our Health Fund lost each fiscal year. The Fund’s fiscal year runs from June 1 to May 31.

You will see that in 2005, our Trustees agreed to reduce the money going into the Health Fund on Aug. 1—despite almost $6.5 million in losses reported by the plan in the previous two years.

The monthly contribution was increased slightly on Feb. 1, 2006 by a dime but this was still less money than what was contributed to the Health Fund in 2004 and far less than what was needed. Overall, from Aug 1, 2005 to Aug 1, 2006, our Fund lost 15¢ per hour in contributions compared to the previous year.

In all, millions of dollars were diverted from our Health Fund to our Pension Fund in 2005 and 2006.

Click here to download the leaflet “What Happened to the Money?”

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