The UPS/IBT Pension Plan and Contract Negotiations 2013

     Here is a discussion of the guarantee for benefits posted by George in 2009. The guarantee applies to drivers that retire prior to the 2013 contract.
     While it is assumed that the guarantee will continue under the newly negotiated contract, that assumption is not for sure.
     Any of you drivers that will not retire prior to August 2013 better be on the phone to your Local Union Officers to make sure that the National Negotiating committee has this discussion with the company. If the guarantee is not continued, many of you may be subject to pension benefit decreases with the failure of the Central States Pension Fund.
     Please note that the CSPF is not failing, but due to federal law, they have been forced to reduce benefits to maintain solvency. Posted by Bob Sep. 2012

 When UPS set up the UPS/IBT Full Time Pension Plan for employees covered by the Central States Plan (CS), it covered active employees only. You have to work at least one day after Jan 1. 2008 to go with UPS out of CS and into the new UPS/IBT Plan. People who retired before Jan 1, 2008, or for any reason were not able to work one day after that date remain in the Central States Plan.

For those who went into the new plan, UPS will pay their pension until they reach the age of 65, then most of it (about 90%) will fall back on Central States. At that point, retirees will get 2 checks one from UPS and one from CS. If Central States is not in good shape and cannot meet their obligations to these retirees, then UPS will make up the difference to guarantee your full pension amount for the rest of your life. UPS is assuming this obligation until age 65 to remove retirees from the CS re-employment restrictions, which are quite severe. Those restrictions are removed at CS at age 65. It was one of the selling points to get UPSers to accept the UPS pension plan.

Those who remained in the CS Plan and did not go to the UPS/IBT Plan are at the mercy of Central States and their full pension amount is not guaranteed. Under the Pension Reform Act of 2006, Central States will never be allowed to fold up and let their obligations fall on the Govt Pension Guar. Corp. Central States will always have to remain in existence and pay pensions at whatever level they can afford. It could be the full amounts or any percentage thereof.
So for retirees who voted for the new Pension Plan and will retire under the new Plan, it’s a pretty good deal. It guarantees a full pension for life. But what about oour brothers and sisters who retired prior to Jan. 1, 2008? They stay with CS and have no guarantees.
Should we have stayed with Central States and rejected the UPS offer?

The problem with staying in Central States as opposed to going with the new UPS/IBT Pension Plan is that if we stayed in CS and CS went down, we would go down with it. I have always felt that I will outlive CS. That means I feel that by the time I reach 65 or 70 or 75, CS will no longer be paying full pensions. The new UPS/IBT Pension guarantees my full amount for life. That is a better deal for me as I go into my golden years.

Central States unfortunately does not have a good track record for being healthy. They have already reduced the amounts members accrue towards their pension. They do continue at this time to pay out full pension amounts, but not at the amounts the did prior to 2003. In 2003, they reduced the accrual amounts to about 85 cents on the dollar, with a 6% per year early retirement penalty. So if you retired at 57 with 30 years today, instead of $3000 a month, you would recieve about $2650. You would get the $100 for each year of service up to 2003 (24 years) but only about $85 a month for the last 6 which accrued after 2003 and that amount would be reduce by 6% for each year you were under 62 or 36% of the $85. So people accruing a significant amount of their pension after 2003 would get a lot less than the expected $3000 at 30 and out, especially if they were under the age of 62.

The cost of insurance from CS, which UPS matched both coverage and cost to retirees, was upped in 2003 from $50 to $255 a person and set to increase $50 each year until you reach Medicare age. So for you and the wife, it would be 510/month the first year, then $610 next year and so on. If you retired at 57, by the time you reached Medicare age it would be $1400 a month. Under the UPS/IBT Pension, the same insurance is $200/person guaranteed not to increase for the life of the contract.

Even more scary, last year CS sent a letter out to all participants (which officially we still are) saying that despite the infusion of cash from the UPS buyout, they were slipping into the dreaded Red Zone and would be forced to make cutbacks again because of the requirements of the 2006 Pension Reform Act which say they must stay viable and cannot fold. One area that they were looking at for cutbacks was eliminating the ‘and out’ language, meaning you could retire at 57 but could not pull a penny of your pension until you reached retirement age of 65. For anyone looking to get out of UPS before the age of 65, that would mean finding alternate employment until you reach retirement age and could begin receiving your pension. That would be totally unacceptable.

Central States once had 115 companies paying in to the fund, they are now down to less than 20. UPS felt that under the new 2006 Pension laws that say active companies in any underfunded plan must pony up more money, they were going to be left holding the bag for Central States. All the retirees from all the folded companies still get their pensions and the 20 companies still standing have to fund those pensions plus their own. So UPS wanted out. And as you can surely see, the guanantees and the insurance costs to retirees were a good deal for UPS employees voting in December of 2007. It not only restored the full pension amounts ($100 per year for 57 and older) but also guaranteed a defined benefit amount for life. And the insurance was cheaper.
Did UPSers sell out their own UPS brothers and sisters who retired prior to 2008? There was surely no reason to hang with the ailing Central States other than Brotherhood.
Granted, Brotherhood is a noble cause. It’s the very foundation of unionism.
But at what price??

What Big Corporations Feel

Slammed for Using Food Stamps: Ga. Woman Seeks Apology

Is a $15 gift card enough to compensate for public humiliation at your local grocery store? According to one Georgia woman, the answer is absolutely not.
     Cindy Nerger, 28, who relies on food stamps to feed her family, said she was brought to tears after being embarrassed by a manager at a Kroger store in Warner Robbins, Ga.
     “He said, ‘Excuse me for working for a living and not relying on food stamps like you,'” Nerger said the manager told her.
     The man’s comment came after Nerger and two other store employees disagreed over whether her total purchase was eligible for food stamps – the employees had insisted that roughly $10 of her bill was not covered. She said the manager ultimately told the employees to “just give it to her.”
     After Nerger then stressed that she had been right all along, the man made his “working for a living” remark, she said.
     “I turned around and realized how many people heard him and how many saw that happened and I was so embarrassed… I started crying,” she said.
     In a statement to, a Kroger spokesman said, “We deeply regret our customer’s experience. The comments made were not reflective of our company’s policy. We value all of our customers. Please know that we have taken immediate steps to make sure something like this never happens again.”
     The spokesman did not reply to a follow-up message asking for more information, but a local Georgia television station reported that Kroger had transferred the manager at the center of the controversy to another store.
     Nerger said the reason she and her family – she is married with a daughter – must rely on food stamps is because her husband’s carpentry business isn’t profitable enough to support the family.
     Meanwhile, Nerger must devote 12 hours every night to a dialysis treatment to combat her kidney disease, which she’s struggled with since the age of 11. She’s been on a kidney transplant list for five years and hopes that someday, after a successful transplant, she can become a working member of society. She would like to attend college to major in child psychology.
     “There’s just so much stigmatism put on people on food stamps. They’re just some losers who don’t want to work. That isn’t the case in every situation,” she said.
     Nerger’s account of her run-in with a Kroger manager went viral after she posted it to her Facebook page, prompting friends to encourage her to post a message to a local television station. The station ended up contacting her and doing a story.
     Kroger, meanwhile, responded to a complaint Nerger passed on through the store’s national customer service line by apologizing and offering her a $15 gift card. Nerger said she rejected the offer because she doesn’t plan on shopping at Kroger again.
     What she wants, she said, is an apology directly from the manager, whom she also believes should be demoted from his job and trained how to treat customers properly.
     She stopped short of saying the man should lose his job.
     “I didn’t want anybody to be in the food stamp line with me,” she said.

Operation iPhone Drop: From Cargo Plane to Door Stoop

On Friday parcel carriers will deliver over 1 million new iPhones to early adopters, in a kind of secular Christmas for gadget lovers everywhere. Behind the scenes, Operation iPhone Drop is a massive logistical ballet, reliant on a clockwork collaboration among Apple, Chinese manufacturer Foxconn, U.S. Customs officials at the border, and shippers like FedEx and UPS.

“I have heard that 70 charters have already been booked to come out of Asia in the next few weeks,” says research analyst Kevin W. Sterling of BB&T Capital Markets. “I think that most of that, I can’t verify it, but I think most of it has been booked by Apple.”

Apple launches historically trigger a six-week long jolt to the global shipping system, according to Sterling. During the iPad release in March 2012, the increase in volume drove up shipping prices from Asia by 20 percent in a week, Sterling estimates, “because Apple came in and bought up so much air freight capacity.”

“It’s fascinating to see one company influences the market so much. We’ve never seen something like this,” Sterling says.

Once the gadgets land in the U.S. and clear Customs, delivery services spring into action. That’s where the fun begins. At UPS, Apple launch days begin with organized pep talks a few minutes before the drivers hit the road, according to a UPS driver who spoke with Wired on condition of anonymity. In that early morning meeting drivers are reminded of how important the day’s deliveries are, and briefed on special procedures.

“One thing we do is if we can’t complete the delivery by the end of the day, what we have to do is offload those packages,” the UPS driver said. “We have to bring them to our supervisor and put them in their offices.” The supervisor then locks up his or her office, keeping all those iPhones safe until the next day.

“Apple is huge customer for UPS and they go through great lengths to take care of them,” the driver added. (A UPS spokeswoman declined to comment on the company’s partership with Apple. FedEx, which also delivers iPhones, did not return a phone call.)

The driver described a palpable excitement while delivering the first batch of Apple goods. Some people take the day off to receive their device at home — not a bad idea, because all Apple deliveries require a signature. ”It’s amazing; people are waiting by the front door and on the porch,” the driver says, “They’re out there at 10:30 a.m. waiting.”

At one delivery last year, the driver recalls, “This lady came out of her house, walked down her driveway while I was in the back of the truck grabbing the packages. When I came out, she was sitting there at the curb waiting for me. I was like, ‘Wow.’”

The driver even shared an iPhone 4S unboxing moment with one customer. ”I got there kinda early and said, ‘Hey, let’s open it up and look at it.’ … We opened it up together. I’d heard about it, but I hadn’t seen one up until that moment.”

Surprisingly, the excitement of customers on an Apple product release is only slightly higher than a usual work day. On a scale of 1 to 10, the usual day ranks as a 6, while iPhone day ranks at an 8 or 9, according to the UPS driver.

“We’re always bringing stuff that people want,” the driver says.

There’s probably a large amount of post-delivery giddy dancing going on behind closed doors.

Leadership Needed on Fiscal Debt, Global Trade, Says UPS CEO

UPS Chairman and CEO Scott Davis called on leaders in Washington, D.C., to prepare a bipartisan debt reduction plan by January, saying the nation’s economy is being held back by its debt load and the uncertainty of fiscal policy.

“It’s not too late to act,” asserted Davis, adding a debt reduction plan should be drafted now for immediate consideration when the newly elected Congress returns in January.

“I believe it’s realistic to have it approved early next year,” said Davis. “If our leaders work together and can compromise, we can deal with these problems and get our nation on a sustainable fiscal path.”

In a speech prepared for delivery later today to a gathering of Washington state business leaders, the UPS CEO described the United States as having reached a crossroads.

“At this moment, our country’s Board of Directors — the President and Congress – are facing not one, but two self-inflicted crises: the impending fiscal cliff and the crushing trade imbalance.

“Because Congress couldn’t agree on common sense fiscal reforms last year, we now face a double whammy of potential shocks to our economy,” he added, citing automatic spending cuts and tax increases that are slated to kick in at the beginning of 2013.

Uncertainty about the looming “fiscal cliff” is causing many businesses to delay spending decisions, he said.

“When companies don’t spend and hire, the business engine driving our country sputters along. And the economy stagnates.”

Davis said the gridlock in Washington fosters doubt about the near term future in the minds of business leaders. “We need a predictable environment in which we can plan, invest, hire, grow, trade and prosper.”

A former chairman of the Atlanta Federal Reserve’s Board of Governors and a member of the CEO Fiscal Leadership Council, Davis also is supporting a new campaign called “Fix the Debt.” The effort is being led by former U.S. Senator Alan Simpson and President Clinton’s Chief of Staff Erskine Bowles.

Davis supported the work of a bipartisan debt commission led by those two men that called for lower tax rates, fewer deductions and common sense entitlement reform. While no plan will ever be perfect and agreed upon by all, bipartisan compromise must be achieved to reach a deficit reduction of at least $4 trillion, he added.

Davis also called on U.S. leaders to demonstrate stronger leadership on global trade. He applauded recent deals with South Korea, Colombia and Panama but added: “These recent trade deals should be the first of many, not the last in memory.”

The 19 trade agreements currently in effect are inadequate, he asserted. “Trade has always been the world’s most powerful engine of growth, job creation and prosperity.”

During his remarks, Davis told the story of Jim Casey’s founding of UPS in the Seattle area in 1907 as a small bicycle messenger service, describing in some detail the company’s evolution into a global logistics leader that delivers an average of 15.8 million packages a day in more than 220 countries and territories.

He contrasted the company’s transformation over the past 105 years to the federal government’s rigid and ideological approach to dealing with today’s challenges.

“I want our elected officials in Washington, D.C., to start running this country the way we run our companies: with real leadership, courage, discipline and foresight. Simply put, we need our representatives to reach out more and to dig in their heels less. Our country needs pragmatic leaders who work together to solve problems.”