Officials at United Parcel Service Inc., Atlanta, and Teamsters Central States, Southeast & Southwest Areas Pension Fund, Rosemont, Ill., reached an agreement on the companys potential withdrawal from the $20.7 billion fund, according to a letter the Washington-based International Brotherhood of Teamsters sent to local union offices.
The specific terms of the agreement are being finalized by the company and fund, said the letter by James P. Hoffa, Teamster president and co-chairman of the Teamsters National United Parcel Service Negotiating Committee, and Ken Hall, co-chairman of the committee.
Norman Black, UPS spokesman, said he couldnt confirm an agreement, but said UPS officials have been talking with Central States officials to obtain information that will be important to further negotiations.
UPS and the Teamsters agreed in July to suspend national contract negotiations so UPS officials could begin talks with Central States officials. UPS has made progress in discussing the information we need, Mr. Black said. We are not done yet.
UPS expects to resolve its request for information from Central States before resuming contract negotiations with the Teamsters, Mr. Black said. The UPS/Teamsters contract expires Aug. 1, 2008.
Mr. Black declined to say if UPS was also talking with any of the other 20 jointly trusteed Teamsters pension plans to which UPS contributes or to provide other details about the Central States talks.
Central States officials Mark F. Angerame, CFO, and William J. Nellis, attorney, couldnt be reached for comment.
In the letter, Messrs. Hoffa and Hall said: As you have been advised, these matters are strictly between the company and Central States. Neither the negotiating committee nor the international union has any authority or legal right to participate in those negotiations.
Any agreement between UPS and Central States cannot be implemented unless it is accepted by the (Teamsters) negotiating committee and ratified by the members, the letter said. In short, the existence of the agreement between Central States and UPS does not mean that UPS is free to withdraw from Central States and establish a new, jointly administered Teamster pension plan for its employees.
The Teamsters committee still awaits official notification of the agreement, according to the letter.
UPS is the biggest contributor to the Central States fund, and its employees account for the largest number of Teamsters members. UPS contributes to 20 other Teamsters jointly trusteed plans covering UPS employees.
In May, the Teamsters issued a statement revealing a proposal by UPS and the Teamsters to create a joint UPS-Teamster pension plan to cover full-time UPS employees who currently obtain their pension benefits from the multiemployer Central States fund. The proposed plan would cover only UPS employees. It would be jointly administered by UPS and the Teamsters, that statement said. UPS would pay withdrawal liability that would have to be determined to leave the Central States fund, the statement said.
UPS officials wouldnt comment about that proposal. Galen Munroe, Teamsters press secretary, said the Teamsters would not comment beyond the two statements.
UPS and the Teamsters opened negotiations on a new contract last September specifically to discuss exclusively pension and health-care issues, Mr. Black said. Both sides took the unusual step of opening talks almost two years before the present contract expires because both recognize how difficult it is to settle the two issues.
UPS is concerned about severe underfunding of some of the Teamster plans; the use of UPS contributions to subsidize pensions of people who have worked for other companies that went out of business and no longer contribute into the Teamster plans; and disparate pension benefits at different Teamster funds for the same UPS work and length of service.