Would you really want the Teamsters to oversee your pension fund? That is a question organized workers at United Parcel Service Management of United Parcel Service Inc. have to ask themselves in the UPS strike.
The company's desire to change the pension plan is the major stumbling block to an agreement for a new contract for the 190,000 workers that belong to the International Brotherhood of Teamsters, according to a Pensions & Investments report.
Management at UPS wants to withdraw from the various Teamsters' multiemployer pension plans and start a new UPS plan. UPS representatives contend the move would increase workers' pensions by an average 50%.
Teamster union officials oppose the proposal. They say the move would endanger the pensions of hundreds of thousands of union members left in the multiemployer plans.
Luckily for Teamsters leaders, they have the part-time worker issue to exploit with the public, however less persuasive they are in manipulating it. In trying to influence opinion, the Teamsters might find pensions a harder issue. There is little union leaders can boast about in pensions.
The Teamster leadership is rightly concerned about the withdrawal of UPS risking the financial soundness of the multiemployer plans. But a large part of the reason the funds would be troubled is the problems caused by the leaders of many Teamsters' multiemployer plans over the years. Some top union-connected leaders have "raided," that is, have corrupted, many Teamsters' multiemployer pension plans in the past, including the once-notorious Teamsters Central States, Southeast and Southwest Areas Pension Plan.
UPS is the biggest corporate contributor to the Central States plan. Based in Rosemont, Ill., the plan has operated under a federal court consent decree for some 15 years. It is court-certified free of corruption, but not of controversy. One Central States trustee resigned last year; R. Jerry Cook was under investigation in connection with funneling money to his spouse while he was a trustee of another Teamsters fund.
There is still a cavalier approach to managing the Central States fund. It is secretive about its investing practices, even trying to hide its international investments in obscure language; moreover, its court-supervised overseers, which have a responsibility to the public, decline to make easily available reports about the fund.
UPS rightly questions subsidizing the Teamsters' multiemployer plans, numbering 20 or 30. The company argues if it did not do so, it could increase benefits under a new UPS plan. The company proposal would be jointly trusteed, like a multiemployer plan, giving the union significant representation with management on a new UPS plan board. So the union can't brand the UPS proposal as hijacking worker involvement in their retirement plan.
UPS would pay withdrawal liability, an amount the company estimates close to $1 billion. Its leaving could weaken the multiemployer plans. Union leaders bear a large part of the responsibility for the troubles at the funds for not being vigilant in their management. Now, the plans face competition in the form of the UPS proposal.
The workers at UPS didn't vote for the strike; union management, as its prerogative, called it. It would be interesting to see what would happen if the union, as a supposed voluntary association, conducted a vote among UPS workers between the Teamsters' plan and the UPS proposal.