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Teamsters Keep Up Fight After Pension Bill Signed

Even though Congress has approved major pension reform legislation and President Bush has signed it, the Teamsters union still hopes to delete a provision from the bill that would eliminate early retirement benefits.

August 17, 2006
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Even though Congress has approved major pension reform legislation and President Bush has signed it, the Teamsters union still hopes to delete a provision from the bill that would eliminate early retirement benefits. The 1,099-page measure is now law, but that doesn’t mean that it won’t be revised. Congress has agreed to consider "technical corrections" that would be incorporated in a future bill.

The union is upset about so-called "red zone" rules that would allow multiemployer pension plans that are less than 65 percent funded to cut back on "early out" benefits that have been earned by truck drivers, carpenters and other laborers. The change must be approved through collective bargaining, but the Teamsters say that companies will maintain the upper hand in negotiations.

Under current law, the plans can change early retirement rules for future years. But they must pay participants the amount of money they have already earned by the time the plan was revised.

Union members charge that Congress is taking away benefits that were negotiated as if they were wages.

"Allowing employers to cut an already earned benefit is unprecedented, unfair and unnecessary," says Frank Bryant Jr., a member of the Central States Pension Improvement Steering Committee. "What Congress wants to do now is come into our bank account and withdraw our money."

Bryant, a truck driver for UPS for 31 years in North Carolina, accuses his former employer and other corporations of seeking to reduce their retirement costs by promoting the change.

"They do not want to live up to their responsibilities," he says.

The leader of a coalition of unions and companies, however, argues that without the option of dropping early retirement benefits when they’re in severe trouble, multiemployer plans would shutdown—leaving all participants worse off.

"If they can’t have that additional flexibility, then plans will fail and there won’t be plans for future generations," says Randy DeFrehn, executive director of the National Coordinating Committee for Multiemployer Plans.

DeFrehn heads the Multiemployer Pension Plan Coalition, which is comprised of 50 companies and unions, including UPS. The group strongly endorsed the pension reform bill.

DeFrehn says Teamster opposition stems more from internal union politics than the substance of the bill. The Teamsters stand apart from their union brethren in objecting to the bill. The United Auto Workers endorsed it.

The legislation drew strong bipartisan support, including from Democrats who are usually union stalwarts. That point wasn’t lost on Bryant.

In a letter to Sen. Edward Kennedy (D-Massachusetts), he wrote: "We were shocked that you would have been so unresponsive to 1.4 million Teamsters who depend on the earned pension benefits that you and your fellow Members of Congress are allowing to be taken from us. This feels like theft. You’ve always done right by workers and we ask that you come back to our side on this issue."

Bryant asserts that Kennedy and other legislators were influenced by corporate donations. "It’s a shame that our elected representatives are up for sale."

The multiemployer coalition sees it differently.

"Like the plans this measure will protect, the passage of this legislation is in itself an example of what can be accomplished when labor, management and government work collaboratively on matters of mutual concern," the coalition said in a statement.

Mark Schoeff Jr.

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