Central States Pension Fund Drops YRC Worldwide

The largest Teamsters pension fund dropped YRC Worldwide, the largest unionized trucking company, as its Teamster employees prepare to vote on whether to accept a 15 percent wage cut and a suspension of company pension contributions.

The Central States Southeast and Southwest Areas Pension Fund notified the principal officers of Teamster union locals last week that its trustees had decided to “terminate the participation” of YRC and USF Holland in the fund, effective July 9.

The move won’t affect employee pension benefits accrued before July 9, but there will be no additional accruals “unless and until YRCW resumes participation,” Central States Executive Director Thomas C. Nyhan said in a letter attached to the notice.

In the notice, dated July 17, Nyhan said the letter would be sent to Teamster participants “in the near future.” Nyhan did not respond to a request for comment July 21.

The fund's move sets the stage for a Teamster employee vote on a plan YRC Worldwide and the Teamsters leadership unveiledlast week to save the financially troubled less-than-truckload giant hundreds of millions of dollars by cutting Teamster wages and stopping company pension contributions for 18 months.

“The pension fund cannot simply agree to allow an employer to continue to participate while incurring a growing contribution delinquency in the tens of millions of dollars,” Nyhan said in the letter.

Ballots are being mailed to YRC Worldwide’s Teamsters employees, and the vote is expected to be complete by Aug. 6. If ratified, the contract changes would take effect immediately and save YRC more than $800 million in the next two years alone.

In June, the company negotiated a pact with Central States to put up property as collateral for $83 million in second-quarter pension contributions. Since then, YRC reportedly has negotiated similar agreements with several pension funds, saving another $11 million.

Central States is one of the nation’s largest multiemployer pension plans, providing monthly benefits to over 210,000 retirees and their surviving spouses. Since 1955 it has provided more than $40 billion in retirement benefits to Teamsters and their families.

Contact William B. Cassidy at wcassidy@joc.com.