PENSION PROBLEM RELIEF

THE TRUCKERS AND TEAMSTERS have come to a "working agreement" (nothing's signed yet) on a step-by-step process for phasing out truck companies'

financial liabilities for withdrawing from the Teamsters' pension funds. The pact also contains changes in funding rules designed to strengthen pension

plans.

Leo Abruzzese, The Journal of Commerce's trucking reporter in Washington, broke the story Tuesday. He got wind of it while prowling the hospitality suites at the American Trucking Associations Management Conference in Washington.Only a general outline of the pact has emerged, and for the agreement to become effective would require congressional legislation. But even at this stage it represents a major breakthrough for the trucking industry and organized labor, and it could conceivably serve as a prototype for other industries and unions.

Withdrawal liability is a carrier's share of a pension plan's unfunded vested benefits. With the increased number of trucking companies that have gone out of business or declared bankruptcy since the deregulation of the industry in 1980, the liability for all trucking companies (bankrupt and not) has become a destabilizing financial threat to the trucking companies and the Teamsters' pension funds. It also has discouraged start-up companies from employing Teamsters-affiliated employees.

Most important, however, existing trucking companies that employ Teamsters would be relieved of the problem of incurring greater liability as more companies go out of business or choose not to participate in the pension programs.

The agreement would phase out withdrawal liability, probably over a period of 10 years, for carriers remaining in the pension funds. However, during that time, the pension plans would have to meet certain financial criteria before a percentage of the liability could be eliminated each year. Under the agreement, new companies could join the pension funds without incurring labilities.

The American Trucking Associations, which represents thousands of trucking companies, deserves to be commended for taking a leadership role in developing this agreement. The Teamsters also deserve commendation for first recognizing the plight of the trucking industry and then entering into a negotiation process that should prove useful both to themselves and the trucking industry.

In confirming that a "working agreement" had been reached, Thomas Donohue, ATA president, espoused the proper attitude, in our opinion, needed to reach difficult compromises between management and labor. "We have a legitimate interest in and responsibility for the employees of the companies we represent," he said. "They are not only Teamsters, they are our companies' employees."

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