UPS and Teamsters form 5 year agreement

Reuters is reporting this evening that UPS and the Teamsters have reached a tentative agreement forming a new 5 year agreement.   While the new agreement may include new wage increases and healthcare concessions, the key issue is the UPS participation in the Central States pension.

UPS is the largest employer of Teamsters, as a result, the agreement drives all other Teamster contracts.   Exiting the Central States pension plan is key for UPS because as the largest teamster employer, UPS would have to underwrite the viability of the pension plan it participates in.   Under a new agreement, UPS has sought to form a new pension plan for its drivers only. 

If the UPS/Teamsters plan is settled as expected, the 2008 Teamster master contract can be settled. Traditionally the master contract has followed settlement of the UPS contract so that new terms and conditions can be adopted.

clipped from www.reuters.com NEW YORK, Sept 30 (Reuters) - United Parcel Service Inc. (UPS.N: Quote, Profile, Research) on Sunday said it reached a tentative, five-year agreement with the union that represents around 240,000 full and part-time UPS employees in the United States. UPS said the deal includes wage increases and significant contributions to healthcare and pension plans for the International Brotherhood of Teamsters.The agreement allows UPS to withdraw employees from the Central States pension plan and to establish a jointly trusteed single-employer plan for this group. UPS will make a pre-tax $6.1 billion payment to the Central States plan in connection with its withdrawal.

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