Teamsters, UPS Agree to Share Pension Oversight

UPS and the Teamsters Union reached a tentative agreement for a five-year contract covering about 240,000 full- and part-time package employees in the United States. Both parties said Sept. 30 that the agreement, if ratified by the workers, will raise wages and increase the company's contribution to pension funds and also health and welfare benefit funds when it takes effect Aug. 1, 2008. Negotiations had been under way for a year to meet the union's deadline of Oct. 1, 2007.

Significantly, this potential contract will create a jointly administered pension fund for affected Teamster members -- giving the union some control over legacy costs, just as the UAW's pending agreement with GM entails. The UPS agreement allows UPS to withdraw from the Central States Pension Fund; the company will make a pre-tax $6.1 billion payment to the Central States Plan and will fully fund the new plan, according to the Teamsters.

"We made it very clear to the company that we needed to reach a tentative agreement by October 1 so that our members could ratify a contract before new pension rules that could adversely affect our members take effect on January 1, 2008," said Jim Hoffa, co-chairman of the Union's National UPS Negotiating Committee. "We met that deadline and have negotiated an agreement that will greatly benefit our members at UPS, as well as Teamster members in other industries covered by pension and health and welfare funds that will receive the contribution increases."

"This is a proud day for the Teamsters," Hoffa said. "While workers' wages, benefits, and working conditions continue to come under attack by other employers, we have taken steps to improve and protect our UPS members for years to come." Representatives of each UPS local union will meet in San Diego Oct. 11 to review the agreement before members vote by mail on the contract, with results expected in early December.

"This agreement is good for our people, good for our customers, and good for our company," said Mike Eskew, UPS's chairman and CEO. "This agreement will allow us to remain competitive in a challenging marketplace. And the fact that we have reached an agreement earlier than at any time in our history is a testament to the skills and determination of all those involved in these talks."

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