Teamsters pension crisis sapping Hoffa’s support, power

Patrick Howley Political Reporter
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International Brotherhood of Teamsters general president Jimmy Hoffa Jr.’s response to his union’s pension crisis is sapping Hoffa’s support among Teamsters members, according to insiders.

The International Brotherhood of Teamsters is one of the forces lobbying Congress for legislation based on the National Coordinating Committee for Multiemployer Plans’ report “Solutions, Not Bailouts.” The report urges new congressional legislation to allow “deeply troubled” funds to cut employees’ pensions.

The Central States Pension Fund, which serves Teamsters members across the country and which also happens to be “deeply troubled,” has joined the Teamsters in lobbying for the new legislation. Insiders believe that the Fund plans to make across-the-board pension cuts.

The Teamsters’ unwillingness to allow companies to move Teamsters members out of the fund and into more secure retirement plans has enraged Teamsters members and sparked backlash against Hoffa.

“In that they’re calling for pension cuts, they’re on the wrong track,” Ken Paff, national organizer of the reform group Teamsters for a Democratic Union, told The Daily Caller.

Approximately 3,000 active and retired Teamsters converged on their Kansas City union hall Tuesday to voice their displeasure with Hoffa and the Central States Pension Fund.

“It should be about solidarity. In my 32 years as a Teamster, we have stood up for each other. … We should be doing the same to defend the pensions of all Teamsters,” one retired Teamster told Central States Pension Fund official Al Nelson at the Kansas City event.

The Central States Pension Fund was founded by Hoffa’s father in 1964 and supports tens of thousands of Teamsters members in 29 states. The fund now collects roughly $700 million per year in employee contributions while paying out $2.8 billion in benefits.

“There is a reasonable possibility that this plan could run out of money in about a dozen years,” Central States Pension Fund executive director Thomas Nyhan recently admitted.

Every time a company withdraws from the fund, that company’s share of the total pension payouts must be picked up by the other companies in the fund, according to Central States guidelines. This arrangement causes considerable pressure when major companies choose to pull out of the fund.

UPS paid $6.1 billion to exit the fund in 2007. Hoffa allowed UPS to withdraw from the fund in exchange for a card check neutrality pledge allowing the Teamsters to organize UPS Freight, which became a division of UPS after the company purchased the freight shipper Overnight in 2006.

A Central States Pension Fund official later called Hoffa’s decision a “mistake” and said that the Fund, but not Hoffa, wanted to stop UPS from withdrawing.

Insiders believe that Hoffa’s inability to keep UPS in the fund began to turn the tide of popular sentiment against him. One insider referred to the withdrawal by UPS as “Hoffa’s Iraq” — a reference to President Bush’s disputed decision to remove Saddam Hussein.

Hostess Bakeries, which recently filed for bankruptcy, can no longer pay into the fund, adding more pressure on other companies still paying into the fund.

Republic Services/Allied Waste, a waste management company, is now rumored to be mulling an exit from the fund. The company has already proposed that its garbage truck drivers leave the fund and move into the same 401(k) retirement plan as Republic Services management.

In response, the International Brotherhood of Teamsters launched a strike this month involving 106 Republic Services/Allied Waste Teamsters in Youngstown, Ohio. Though the Youngstown strike is now in its third week, nationwide enthusiasm for the strike among Teamsters members has been low.

Hastily assembled “sympathy strikes” by other Republic Services Teamsters outside Youngstown have been shortlived.

“The real reason for these pickets is to harass Republic into staying in the dying Central States Pension Fund,” a Republican Services official said Tuesday.

More than 150 Republic Services Teamsters broke with Teamsters leadership and crossed picket lines Tuesday to return to work in Ohio and Tennessee, expressing a lack of enthusiasm for the Youngstown cause and also dissatisfaction with Hoffa’s policies.

“Trash collection resumed in Toledo today — one day after Teamsters Local 20 delayed trash pickup by participating in a sympathy strike for workers in Youngstown. About 30-35 drivers crossed the picket line early today, allowing Republic Services to cover all commercial routes in northwest Ohio and more than half of the residential routes,” according to a statement by a Republic Services official.

A spokesman for the International Brotherhood of Teamsters declined to comment.

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Patrick Howley