The tentative agreement covers wages and healthcare and pensions for the 240,000 unionized UPS workers.
Under the agreement, UPS will be allowed to withdraw employees from the Central States multi-employer pension plan and establish a jointly trusteed single-employer pension plan for that group. UPS will make a $6.1 billion pre-tax payment to the Central States plan in connection with its withdrawal.
“We made it very clear to the company that we needed to reach a tentative agreement by October 1,” said Jim Hoffa, Teamsters general president. One rationale for the early deadline, explained Hoffa, was new pension rules that take effect January 1, 2008.
In separate news, the Teamsters also reached a tentative agreement with UPS Freight in Indianapolis. The local agreement will serve as a model to organize thousands of other company employees nationwide, said Hoffa.
The contract in Indianapolis covers 125 drivers and dockworkers. “For more than five decades, the workers at UPS Freight and its predecessor Overnite Transportation have fought for Teamster representation,” Hoffa added. He said the Teamsters had gained “strong momentum” to organize throughout the freight industry, “and FedEx Freight is next.”