The FACTS About the Teamsters Pe

The FACTS About the Teamsters Pension Plan

Important Information on the Western Conference Pension!

On Thursday, January 31, at 1 pm EST, the Teamsters will hold a national conference call with representatives from the Western Conference of Teamsters Pension Trust. A short presentation, as well as a question and answer session will be held. If you have any questions at all about the Western Conference of Teamsters Pension Trust (WCTPT) plan, please participate in this call! The number is 888-428-4480 to participate in the call.

In advance of this call, we would like to provide you with the critical facts about the WCTPT, our best opportunity to achieve retirement security.

No one can credibly doubt that the WCTPT is anything but a great pension plan. Because it is a multi-employer fund, with over 5,000 participating employers, the WCTPT is a secure plan for airline industry employees who work for volatile legacy carriers. As we know all too well, single employer company-only sponsored funds can leave workers high and dry if the employer cannot meet its pension obligations. Multi-employer funds, however, are administered jointly by employer and union representatives, with each side having an equal vote regarding the plan. This makes multi-employer fund pensions much more safe than company-only sponsored single employer pension plans, even if the immediate employer becomes insolvent.

The WCTPT is one of the top performing multi-employer pension plans in the world. For the past ten years this plan has been rated in the top 6% of Taft-Hartley (jointly administered) trusts for investment performance.

The WCTPT has assets of more than $33 billion, and is fully funded on a vested pension basis. This means that even if the world as we know it came to an end and every participating employer went out of business today, the fund could still pay 100% of every vested participant’s benefits. At the same time, the fund is projected to be able right now to pay 93.8% of its participants’ vested AND non-vested (future) benefits. This ratio of 93.8% places the WCTPT among the top pension plans in the country, bar none. The combination of plan assets ($33 billion), the funding ratio (at 93.8% as of January 1, 2006), and many special features make this by far the best plan available.

This Plan must be negotiated with the company. It is entirely employer paid. Once the Teamsters are voted in, it is up to UAL mechanics and related employees to decide whether or not they want the Teamsters to proceed to negotiate with UAL to achieve this plan. If desired by UAL members, the Teamsters as a newly certified representative can serve a Section 6 opener and UAL will be obligated to negotiate over the terms of the new agreement with the Teamsters well before the end of the existing contract. (See Baptiste & Wilder, P.C. letter on Teamster website).

Here are some highlights of the plan:

Participants can earn up to 10 years of past service credits and five years of contributed credits after only five years of employer paid plan participation. (This is the equivalent of 15 years’ credit for only 5 years);
Special vesting rules provide for accelerated vesting using past (i.e., pre-WCTPT participation) employment for participants age 52 or older;
Retirement benefits as early as age 55 (regular full retirement at age 62 with reductions for earlier retirement); and
Death and survivor benefits for your family and beneficiary.

Here is an example of monthly benefits using a flat $2 per hour contribution rate with various years of participation. This is at a normal payment rate (age 62+ with recent coverage), and is assuming 10 years past continuous employment.

Contributory Years (+10 free years) Monthly Benefit

5(+10) = 15 842.40

10(+10)=20 1185.60

15(+10)=25 1528.80

20(+10)=30 1872.00

25(+10)=35 2215.20

What Can AMFA Do For Me to Secure My Retirement?

One reason AMFA is spending so much time attacking Teamster pensions is because IT HAS NOT AND CANNOT PROVIDE YOU WITH RETIREMENT SECURITY.

First, AMFA simply does not have the resources or experience to negotiate a defined benefit pension plan with UAL or even a 401(k) plan with a high enough contribution rate to provide for retirement security. Second, under the agreement that UAL entered with the PBGC (section 6(c)) United is prohibited from establishing a defined benefit plan for ten years. Since AMFA does not have any independent multi-employer funds or any other credible independent retirement plan, that means it CANNOT NEGOTIATE YOU A PENSION PLAN.

Above all, look at our history with AMFA on the issue of retirement security. Its incompetent handling of concessionary bargaining put us into a situation where we have lost 50% of our pension value. (Unlike the Teamsters at Continental where the pension plan was preserved during their concessionary bargaining and not a single penny of pension value was lost).

What About Early Retirement Restrictions?

Let’s get real on this issue. Even with the restrictions you are still way ahead. Think about it, what would you rather have? A great pension plan that provides real retirement security that has some limitation on the number of hours you can work if you retire early or NO PENSION PLAN AT ALL. AMFA may complain about these post-retirement employment restrictions, but it has NO pension plan to offer.

Such restrictions are common in many pension plans as a tool to deal with “double dipping.”
The restrictions are not absolute. You can opt for early retirement and can still work but must limit your hours to 50 per month if you work in your craft—in order to get your pension payment. If you opt to work outside your craft the rules are much more liberal.
The restrictions only apply to early retirement. At age 65 you can work as many hours as you want without it impacting your retirement.

What About My 401(k) Plan?

Negotiation of a defined benefit pension plan will NOT impact your 401(k). The Teamsters have successfully negotiated BOTH (for instance, at Continental Airlines and Frontier Airlines).

What About My Pension with the Pension Benefit Guaranty Corporation (PBGC)?

The negotiation of a pension with the WCTPT will NOT affect your PBGC pension benefits in any way.

What About the Law Suits Against the Teamsters Regarding the Central States Pension Fund and Other Problems with the Central States Plan?

The district dismissed all of the plaintiffs’ claims on summary judgment and the seventh circuit upheld that decision on appeal. The Central States Pension Fund is run by different trustees than the WCTPT, and primarily because it, more than most other pension funds, suffered the brunt of trucking deregulation, it is not as well funded as funds that have had a more diverse group of contributing employers. There is no doubt about it: the Central States Pension Fund has faced difficult financial times over the last several years, but its trustees have taken the necessary steps to ensure that it will remain sound and continue to provide good benefits to its participants. Their actions stand in stark contrast to those of UAL, which simply dumped your pensions on the PBGC, while AMFA did next to nothing to save them.

In any event, the Central States Pension Fund HAS NO RELATIONSHIP TO THE WCTPT. Please check out the WCTPT web site for yourself (www.wctpt.org)

What About the Withdrawal of UPS from the Central States Plan?

UPS has, in writing, agreed and confirmed with the Teamsters that it will not seek to withdraw from any other Teamster Pension Fund.

Even if UPS or another employer withdrew from the WCTPT Fund, the Fund would remain very strong because there are 5,000 other participating employers.

These are the FACTS. When it comes time to vote, let’s VOTE TEAMSTERS, and have to option to secure our future—something we don’t have with AMFA right now!