transportationreport
time bomb for truckers and workers: the fate of the multi-employer pension program established by Congress and commonly used in the trucking industry. An arrangement between
a union and at least two employers usually in a common industry, a multi-employer plan requires member companies to
fund the pensions of workers and retirees not only from their
companies but from other firms participating in the plan.
The program, whose main objective was to allow workers to
change employers without losing their vesting privileges,
worked fine as long as there were enough unionized trucking
firms to spread the cost around. However, as company failures
and consolidations winnowed the universe of unionized
firms, the burden fell on those remaining to absorb an even
larger portion of total retirement obligations, including obligations to retirees who had worked at now-defunct entities.
As a result, YRC and rival ABF Freight System, which
employ most of the Teamster workers covered under the
National Master Freight Agreement (NMFA), the main freight
agreement between the union and industry, are liable for the
pension obligations of retirees who worked for competitors
that have long since closed their doors and who were never
employed at either YRC or ABF.
In 2007, UPS Inc., which is not part of the NMFA, negotiated
a $6.1 billion pre-tax payout to remove 44,000 of its full time
employees from the Teamsters’ Central States pension fund, one
of the union’s largest. UPS, which is the nation’s largest transport company and biggest Teamster employer with 240,000
members, withdrew from the program because it did not want
to face the future liabilities of paying into the Central States
fund for its employees and for workers at other companies.
William D. Zollars, YRC’s chairman, president, and CEO,
has been actively pushing for an overhaul of the nation’s
multi-employer pension program. In addition, YRC and the
Teamsters have thrown their support behind House legislation
sponsored by Reps. Earl Pomeroy (D-N.D.) and Patrick Tiberi
(R-Ohio), and a similar bill introduced in the Senate by Sen.
Bob Casey (D-Pa.), which would shift the pension liabilities of
retirees from failed firms away from the Teamsters and to the
Pension Benefit Guaranty Corp. (PBGC), a federal corporation that protects more than 29,000 pension plans.
However, the union has insisted it will not support any bill
that doesn’t maintain full payouts to so-called orphan
Teamsters, employees who worked for companies no longer in
business but who have accrued benefits all or in part through
their employment at now-defunct firms. Under current PBGC
rules, workers or retirees with orphan pensions are eligible for
a maximum payout of $1,080 per month. That is about one-third of the top payout received by a Teamster member with a
non-orphan pension and identical years of service.
In a February newsletter, TDU made clear where it stands:
“It’s up to our Teamsters Union to make sure that any bill that
is passed would guarantee that the PBGC would pay full pensions and would have sufficient funding to do that.” Both the
Pomeroy-Tiberi bill and the Casey bill would provide those
protections. ;
