He pointed out that UPS is proposing to withdraw from the Central States Pension Fund, creating a new joint union/company-administered pension fund for workers previously covered by the Central States Pension Fund. "In return, the company will pay billions of dollars to cover its withdrawal liability," said the IBT statement. That withdrawal liability amount cannot be deducted from the overall economic package contained in the agreement, Hoffa said. Pointing out that it was a company decision, not a union decision, to withdraw from the pension fund, Hoffa said, "We are still expecting major economic improvements if we are to reach an agreement."
The IBT has set an October 1st deadline to reach an early agreement it can recommend to members. The actual contract does not expire until August 31, 2008.
UPS commented it remains optimistic about the October 1st deadline. This doesn't change the existing contract, commented Norman Black, spokesman for UPS. The contract continues in effect and UPS says it will negotiate until it has an agreement.
Black said two key issues are behind the early start for negotiations: protecting the pensions of all employees and positioning the company for the future in an increasingly competitive market. He noted that both the company and the union recognize what is at stake and intend to build on a positive history including the fact the last negotiations concluded ahead of the contract deadline and at that time the Teamsters agreed to the longest contract in their history.