Funding Notice to Be Mailed Soon

Last month, the Local 804 fund was required by law to have an actuary certify the plan’s status to tell the government if our fund is in the Green Zone, the Yellow Zone (Endangered) or the Red Zone (Critical Status).

Local 804 leaders have known what zone our plan is in since at least March 31. But the membership, as usual, is being kept in the Twilight Zone—with no information about our fund’s status and future.

The membership should be getting some news soon. The Pension Protection Act requires that our fund’s trustees send us a notice by April 30. At the last general membership meeting, Howie Redmond said this notice would be on its way. He did not give any more details.

In the Yellow Zone?

Based on the limited financial documents that our fund has made available to us, it is most likely that our fund is in the Yellow Zone—which means that it is less than 80 percent funded.

To fall into the Red Zone, the fund would have to be less than 65 percent funded AND project a situation in the next five to seven years in which employer contributions and expected investment returns would not be enough to cover benefits and to amortize future benefits.

All funds that are in the Yellow Zone must adopt a Funding Improvement Plan—an official plan to improve funding levels over a specified number of years (usually 10 years or more).

During last year’s contract votes, the company claimed that it would be illegal for our fund to increase benefits for as long as our fund is in the Yellow Zone. But that is not true.

Our pension fund can increase benefits as long as those benefit improvements are paid for over and above the Funding Improvement Plan.

Will Record Contributions Mean a Benefit Increase?

The good news is that the 2008 contract includes record contributions into our pension fund. (This was what was used to sell all the givebacks, remember?)

Under the national agreement, our pension contributions will rise by 65 cents a year or $3.25 per hour over the life of the contract.

In Local 804, this figure will be 70 cents, not 65 cents, at least in the first year. (That will leave 30 cents to go into our health and welfare fund, instead of the 35 cents that other health funds will get).

We also won an extra $1.55 bump in our pension contributions this year—bringing the total first-year increase in pension contributions to $2.25 an hour.

In all, hourly contributions to our plan will climb by more than 40 percent by 2013.

This is good news for our fund. But what will it mean for Local 804 members? Our pensions are set at the same level as they were in 2002. Many other UPS Teamsters now get superior benefits to ours—especially for 30 and out.

Will the contract’s record increases in pension contributions mean that our benefits will be increased?

Members Deserve More Information

Local 804 members aren’t looking for magic solutions or benefit increases that our fund can’t afford. We all want our pension fund to be managed responsibly—something that apparently has not been happening in recent years.

What members do expect—and deserve—is straight talk and real information.

We deserve an honest recounting of what happened to our pension plan and how it developed a $388 million shortfall.

Most importantly, we deserve a thorough report on where the plan stands now, and what our union’s plan is for strengthening our fund and improving our benefits as we move forward.

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