UAW Advocates Lower Pension Fund Contributions

The United Auto Workers are backing a bill that would allow blue-collar companies to pay less into their pension funds than those which employ mostly white-collar workers. The reason? Blue-collar workers tend to die younger.

Said UAW President Ron Gettelfinger in a letter to the New York Times, “We see no reason additional demographic data should not be added to the mix of factors necessary to develop an actuarially sound pension plan.”

The Big Three auto companies’ pension plans are currently underfunded to the tune of $15-20 billion total. Under current rules, the companies will be required to make huge contributions to their funds some time in the next few years.

A Times article speculated that Gettelfinger was looking to save the companies money in order to help pay for wage hikes in contract bargaining this summer.

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The proposed change in actuarial rules is part of a larger pension bill now under consideration. The AFL-CIO has not endorsed the bill, and sees both positive and negative features among its many different provisions. But it is not opposed to companies using special mortality tables for blue-collar workers.

“The bottom line is that we want them to use the most accurate mortality table for a particular plan population,” said Shaun O’Brien of the AFL-CIO’s Public Policy Department. “Based on the evidence we’ve seen, a collar-based mortality table is more accurate than one for the general population.” O’Brien noted that it would be fairer to also use white-collar mortality tables for firms that employ white-collar workers-and thus force larger contributions for those long-lived employees. But the bill as written allows only the blue-collar adjustment, i.e., for smaller contributions.

Retiree Dave Yettaw of Oscoda, Michigan, advocated cost-of-living adjustments on UAW pensions when he was president of a big General Motors local in Flint. “A real union would not be advocating for lower contributions to the members’ pension funds,” Yettaw said. “A real union would say: let us find out why our members are dying so young!”

Yettaw said that instead of looking to save the companies money, the UAW could seek to pass on full pension benefits to spouses when workers die young. “Or if our life span is so short, they could demand ‘25 and out,’” Yettaw said. “During the ‘90s the UAW was silent when the pension fund profits averaged 15% a year and the money was used for investments in Asia and Europe rather than future pensions.”