The desperate situation of the union and the health and welfare fund has workers panicking about their retirement prospects.
Thomas Dunkerley will be eligible to retire in two years when he is 57 years old. But the truck driver is sure that by then, the pension fund he has been paying nearly a quarter of his salary into for the past 27 years will be out of money.
“How can there be any money for me when you've got more money being collected than what is being contributed?” he asks.
Since James Hoffa Jr. became president of the Teamsters in 1999, the Central States Fund has lost more than 100,000 union members who had been paying into the fund. Although almost 300,000 workers are involved in the pension plan, only 77,000 of them are paying into it. The rest are retired or injured, drawing benefits but not contributing to it.
Galen Munroe, Teamsters press secretary, says there is hope the union can increase its membership, but there is no guarantee those new members will be paying into Central States, or any pension, health, and welfare fund at all.
According to Revitte, if the government passes anything resembling universal health care that includes a public option, unions could have greater success organizing and adding members. “If they won't have to pay health care, you are going to see less resistance [to unionizing] from companies,” Revitte says. “Health and welfare have become such a big part of union contracts.”
Some companies have already negotiated withdrawals from the fund and the union has had to fight others from following suit. With health care reform, Teamsters would be able to allow companies out of the fund in exchange for other concessions.
In February of last year, the Kentucky branch of Irving Materials Inc. attempted to withdraw from Central States and replace the pension plan with a 401(k). Ready-mix drivers' union Local 89 fought the attempt and negotiated a new contract that kept them in the fund. Most of Irving's Indiana locations have 401(k) plans rather than participating in Central States. At the time, Local 89 called it a major victory for the Teamsters and for the fund.
But the precedent of allowing companies out of the fund has already been set, and health care reform would make it even easier, and less damaging to the union's members.THE UPS DEBACLE
In a high-profile case, the Teamsters allowed United Parcel Service (UPS), the largest contributor to Central States, to withdraw in 2007 for a one-time payment of $6.1 billion. At the time, Hoffa said the fund would not see a loss because the money would be invested in the stock market, which set a record high that year.