Kroger Co. and the International Brotherhood of Teamsters have ratified a new labor agreement to withdraw active Kroger participants from $15.3 billion Teamsters Central States, Southeast & Southwest Areas Pension Fund, Rosemont, Ill, a joint news release said.
Cincinnati-based Kroger's withdrawal from the Central States fund, which is projected to go insolvent in 2025, was effective Dec. 10, and Kroger will make the requisite payments to Central States to fulfill its withdrawal liability obligation.
The agreement, which affects about 1,800 participants, includes current participants working in facilities in Indiana, Kansas, Michigan, Texas and Tennessee, all of whom become participants in the new IBT Consolidated Pension Fund. A Kroger subsidiary, Roundy's Supermarkets, bargained for a similar withdrawal on Feb. 19 that transfers Kroger participants to the new pension fund.
That new pension fund, Kroger and International Brotherhood of Teamsters officials wrote in September, "cannot become insolvent, like Central States," because employer contributions are based on how well funded the plan is, rather than the traditional flat rate.
In May 2016, Central States' application to reduce benefits to avoid insolvency was denied by Treasury Department officials overseeing the Kline-Miller Multiemployer Pension Reform Act of 2014. The pension fund spends $2 billion more in benefits a year than it receives in contributions.
The new IBT Consolidated Pension Fund calls for a retirement age of 62, with accrual rates starting at 0.75% of salary and rising to 1.125% in later years. Further details are not available.
Keith G. Dailey, Kroger spokesman, did not immediately have additional information. Officials at IBT and Central States could not be immediately reached to provide further information.
