A Teamsters union council representing members of 22 locals in six New England states called on ABF Freight Systems' rank and file today to reject a collective bargaining agreement proposal hammered out last week by Teamsters leaders and ABF management, saying the proposal will dramatically reduce worker pensions.
Teamsters Joint Council 10 New England, which represents 45,000 Teamsters, said the proposed agreement would allow ABF to freeze its current pension contribution rate for the next 63 months starting April 1, which would be the tentative date of the new contract. As a result, workers would see their monthly benefits cut by 60 percent effective on that date, according to Sean M. O'Brien, the Joint Council's secretary-treasurer. They would also lose the right to claim a pension before age 64 and would not be eligible for disability-related pensions before age 64, O'Brien said in a letter today to ABF workers.
In the letter, O'Brien said ABF had the chance to either transition to a new liability payment pool, as other Teamsters employers have done, or to continue paying an 8-percent-a-year increase to maintain the status quo. O'Brien said the proposed hits could reduce the value of each member's pension by about $9,000 per year. The union represents about 8,600 of the Fort Smith, Ark.-based less-than-truckload (LTL) carrier's workers.
Kathy Fieweger, an ABF spokeswoman, said the company is studying the letter and may have comment next week.
Since the bargaining process began late last year, ABF has made it clear that the pension issue was a top priority, especially since the wide cost gap between it and rival YRC Worldwide Inc. had made it difficult for ABF to remain competitive in the marketplace. YRC workers receive benefits amounting to $1.75 an hour. The ABF pension, by contrast, provides benefits equal to $7.83 an hour, a Teamsters source said.
In February, the company warned in a memo that unless the pension issue is resolved, "we must find other ways to achieve an affordable contract."
O'Brien, who also heads Teamsters Local 25 in Boston, had been named in early 2017 by General-President James P. Hoffa to head the union's package division, whose main mission is to negotiate a collective bargaining agreement with the small-package operations of Atlanta-based giant UPS Inc., which employs about 256,000 Teamsters. However, Hoffa fired O'Brien in September 2017, capping a feud that had erupted between the two about who should be included in the UPS negotiation process. O'Brien returned to his dual roles in New England.
Editor's note: An earlier version of this story erroneously attributed the information on ABF pension value to ABF management. It came from a Teamsters source. DC Velocity regrets the error.