Local 727 Opens Trade Show and Trade Show Warehouse Contract Negotiations with Proposal to Withdraw from Failing Central States Pension Fund

| November 13, 2018

Teamsters Local 727 and representatives of Freeman Decorating Company and Global Exposition Services (GES) opened negotiations on Friday, November 2nd for a new trade show industry master collective bargaining agreement as well as CBAs covering Teamsters employed in the Freeman and GES warehouses.

The Local 727 bargaining committees opened negotiations by presenting each Company with comprehensive contract proposals for a master trade show agreement, Freeman warehouse agreement, and G.E.S. warehouse agreement.  Among the Union’s top proposals was the withdrawal of trade show industry workers and trade show warehouse workers from the Central States Pension Fund.

The Central States pensions of trade show members are in danger.  According to Central States, the Pension Fund will run out of money and be unable to pay benefits in 2025.  Once Central States runs out of money, the Pension Benefit Guaranty Corporation (PBGC) will cut benefits of all Central States participants to a maximum of approximately $12,000 per year.  Furthermore, when Central States ultimately fails, the PBGC is not funded well enough to handle the collapse.  Therefore, in order to provide Local 727 members with a secure retirement, the Union has proposed the adoption of a new Hybrid Pension Plan for all trade show and trade show warehouse members.

Local 727’s proposed new Hybrid Pension Plan is a defined benefit plan that differs from traditional pension plans like Central States.  Traditional pension plans pay a certain level of benefits to participants upon retirement no matter the amount invested on behalf of that participant.  The Hybrid Pension Plan will instead require Employers to pay a specified amount per hour worked per participant into the Plan, then, when a participant is prepared to retire, the Local 727 Hybrid Plan will purchase a secure lifetime annuity based on the specific amount contributed on behalf of that participant.

Currently, Employers pay high contribution rates on behalf of each participant to the Central States Pension Fund, yet there is little guarantee participants will ever see the benefit of all the money being put it on their behalf.  On the other hand, under the new proposed Hybrid Plan, Employer contribution costs will be cut in half and each participant will receive a retirement based on the amount Employers specifically contribute on behalf of that participant.  In other words, participants get out what goes in.

There are significant costs associated with Employers withdrawing from a dying fund like the Central States Pension Fund.  When an Employer withdraws from a fund it incurs costs that are called the Employer’s “withdrawal liability.”  The withdrawal liability costs rest solely on the Employer that withdraws from the Fund.  Members are not responsible for any costs associated with the withdrawal liability.  Furthermore, it is important to note that when an Employer withdraws from Central States, members do not lose their vested pension in the Fund.

While the Union bargaining committee focused its attention on the pressing pension crisis facing Local 727 trade show members, the Contractor representatives chose to present and push a proposal for 1-man crews.  Local 727 unequivocally rejected the proposal.

“This Union will never waiver on 1-man crews.  No matter how frequently these Contractors present it, we will continue to vehemently reject it,” stated John Coli, Jr., Secretary-Treasurer of Local 727.  “The Local 727 bargaining committee looks forward to continuing negotiations and securing the best possible contract for all of our members in the trade show industry.”

Local 727 will continue negotiations for the Freeman warehouse contract on November 13th, the GES warehouse contract on November 15th, and the master trade show agreement on December 3rd.  All three current collective bargaining agreements are set to expire on December 31, 2018.

Members with questions should contact Local 727 Business Representative Mike DeGard at (847) 696-7500 or [email protected].

Nothing in this article should be read as the union’s waiver of any legal argument, position or additional grievance. The union does not forfeit its right to make any and all supplemental arguments.

Category: TRADE SHOW

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