Big Bizness (UPS) shows hypocracy of Social Security privitization

[Armstead]

Well, well,well...Amidst all this talk about privitizing Social Security, here's a big business, UPS, that wants to shift the burden for union pension agreements to the Federal government.

Although not directly related to Social Security, it does show how vulnerable private pension plans can be, and there is great irony in a company running to the government for help when it is faced with such problems.

http://www.indystar.com/articles/5/102627-3435-031.html
UPS proposes pension shift
Shipping giant seeks relief from plan in which solvent employer covers benefits of other firms.


By Mary Williams Walsh
New York Times
December 16, 2003


Congress is expected to consider a proposal early next year that would shift responsibility for billions of dollars in future pension promises to the federal government from UPS.

UPS is chafing at its legal requirement to cover retirees of other companies through its participation in multiemployer plans, in which many employers pool the cost of providing pensions for union members.

These plans allow workers to take their benefits with them when they switch jobs and are common in such fields as grocery stores and construction. About 35 million Americans are covered by traditional pension plans paid for by a single company, and about 9.5 million participate in multiemployer plans.

When one company goes out of business, the surviving companies make good on its pension promises. In trucking, many companies have disappeared since the industry was deregulated in 1980. UPS is now the largest company in the pension plans of the International Brotherhood of Teamsters, with potential responsibility for billions of dollars to its retirees. "We have serious concerns over the financial condition of these plans," said David Bolger, a spokesman for UPS.

MORE....

[ajacobson]

1. UPS - eat my shorts

UPS has been trying to pull out of the Teamster pension funds for years. The strike in 1997 was in large part to prevent that.

When an employer withdraws from a multi-employer fund, they have to fund the withdrawl liability (e.g. they have to cover the funding gap that their withdrawl would cause). Usually that amount is so high that no company would want to take that hit. Sounds like UPS is wanting the Feds to cover their withdrawl liability. That is CORPORATE WELFARE, if it happens!!

[arendt]

2. Worth a kick for now. I'll comment later n/t