If you have been reading about what happened to retired United Airline pilots and thinking that can’t happen to me. Think again. The Teamster Union has no (I repeat, NO) obligation to represent you after retirement. After all, you are no longer a dues paying member.
Your medical coverage can be changed in benefits or cost after you retiree. It is legal, as long as the healthcare plan treats all retirees (within a class) equally. Both UPS and the union have increased cost and/or coverage to UPS retirees (depending on which has retiree coverage).
It’s becoming more and more apparent that retirees need organizations specific to their company or industry. United Airline pilots and IBM retirees have strong retiree organizations. Both have won major legal battles with their former employer. The 70,000 UPS retirees do not have an organization. The problem with organizing UPS retirees is that there are so many different healthcare plans for UPS retirees. Some locals are covered by UPS. Some locals are covered by the union. Even those locals that are covered under a UPS plan have different costs and coverage from each other. The issues are different depending where you worked. They (company and union) couldn’t have come up with a more effective weapon to hurt retirees’ interests than this fragmentation if they had tried.
Now is the time. Start contacting fellow retirees. Don’t wait til it’s too late
P.U.P.S. Inc. is an Illinois based UPS retirees club.
IN AN INSTANT, RETIREMENT SAVINGS VANISH
While credit card and online banking accounts are legally protected in the event of fraud, IRA brokerage accounts may come with no such insurance. (MSNBC)--------------------------------------------------
Benefit Cutbacks in Multiemployer Plans
The Pension Protection Act of 2006 permits certain underfunded [Teamster] multiemployer plans to eliminate subsidized [25-30 and out] early retirement, subsidized joint and survivor, lump sum and other benefits.
Under the PPA, multiemployer plans that are significantly underfunded are considered to be in "critical status." If certain procedures are followed, these plans can eliminate subsidized early retirement benefit (and/or subsidized survivors benefits) for workers who have not yet retired. Workers will still get all earned benefits if they wait to collect the pension until normal retirement age, usually age 62 or 65, but the pension will be reduced (typically by 6 percent a year) if collected at an earlier retirement age.
If a plan is severely underfunded (for example less than 65 percent funded) or projected not to meet the IRS required funding within four years, then the plan trustees must provide notice to workers that the plan has entered critical status. They can then recommend cutbacks to the union and employers contributing to the plan. The union and employers must agree to the cutbacks in collective bargaining. Finally, a notice must be provided to workers at least 30 days before the benefits reductions take effect.
If these procedures are followed, the plan trustees can reduce the benefits for anyone who was not retired and collecting benefits on the date when the trustees first provided notice that the plan had entered "critical status," even though that date was [years] before the cutbacks were agreed to by the union and employers.
A provision in the pension law known as the anti-cutback rule prohibits plans from reducing or eliminating certain already-earned benefits. These include special early retirement benefits, such as 30-and-out pensions, and unreduced widows and widowers benefits...
[But] Under the PPA, [Teamster] multiemployer plans that are significantly underfunded are given an exception to the anti-cutback rule’s protection for already-earned subsidized early retirement and survivors benefits.
UPS and the Teamsters Union joined forces to support the "red zone exception". With the Central States buyout behind us, it almost seems as if UPS and the Teamsters had some kind of back-room agreement about the buyout before contract negotiations began.
(EMPHASIS and COMMENTARY Added.)
Teamster-UPS 401K Plan Changes
UPSers in the 401k plan should be receiving a Summary of Material Modifications (SMM). The SMM should be read and understood by particpants. Your 401k is a retirement plan that you control and you ultimately reap the benefits. If you mismanage your 401k you pay the extra taxes or penalities.
The high points of the new SMM include:
Retired particpants can request a partial distribution on the Plan website or by phone for a $10 fee.
Particpants can chage beneficiaries on the Plan website.
Participants can use their employee number instead of their SSN to access the Plan website.
Participant with less than $1000 when they retire or leave UPS will have their balance distributed.
The Magallan fund is no longer part of the plan.The Bright Horizon Fund will mature on July 31, 2005 but will remain in the plan as the Bright Horizon Income Fund (85% fixed income, 15% equities). A new fund Bright Horizon 2045 Fund will be added as the most aggressive fund. Added 7/17/05
Misinformation about Teamster Pensions
Last year John McDevitt, UPS senior vice president, testified before the U.S. Congress and lied about our pensions. Management and an anti-Teamster group of UPS employees continue to spread the same material.
In his prepared testimony a year ago, McDevitt stated that if UPS had contributed to a 401(k) instead of a union pension plan, and “assuming a conservative 7.5 percent rate of return the employee would have a nest egg of $827,000 after 30 years.” And this money could be converted to a pension of $5,833 a month. McDevitt stated this should be “today’s reality” but instead a Teamster would only get about $3,000 a month from a Teamster plan.
Figures Greatly Inflated
UPS management had to know that this was false. His figures assume that the current negotiated pension contribution rate of about $5 per hour has been in place for 30 years.
But thirty years ago UPS was only contributing about 48 cents per hour to the pension. Twenty years ago it was $1.37. Ten years ago it was $2.50. So his figures were greatly inflated. He told Congress that UPS could have provided a $5,833 monthly pension with the same money, and that was totally false.
By using the actual amounts UPS paid into the pension fund each year since 1974 for a full timer who worked every day, calculations demonstrate that this Teamster would get, under management’s system, only $2,394 per month after 30 years! This is less than any Teamster fund provides. (We used management’s figure of 7.5% annual rate of return and their conversion formula from lump sum to a monthly pension. TDU can provide the calculations to interested members.)
Moreover, many Teamster pension plans (Washington D.C., Baltimore, Upstate New York, and the Western Region) today provide benefits over $3,000 per month. Some even pay close to $5,000 per month with thirty years of service. TDU ARTICLE. ADDED 5/16/05.
EEOC Cannot Exempt Retiree Healthcare Plans
From Age Discrimination
A Federal Judge has ruled that companies cannot decrease healthcare benefits of retirees when they become medicare eligible. In other words, a company (such as UPS) or a union would have to maintain the same benefit level for those retirees over 65 year old that they do for those retirees under 65. Article.