Wegmans and local Teamsters officials will resume contract negotiations on Friday, and retirement benefits will be at the center of those talks.
Last week, members of Teamsters Local 118, which represents approximately 900 Wegmans truck drivers and warehouse employees, rejected Wegmans' final contract offer. Union leaders blasted the company's proposal to move the union workers out of a statewide union pension fund and into the Wegmans Retirement Plan.
(Teamsters officials did not return calls for comment and Wegmans spokesperson Jo Natale wouldn't comment beyond the materials the company has sent to the media.)
Wegmans plans to shift the employees into the company's plan because the union fund has less money coming in than it is paying out. The company and the employees have been asked to contribute more to the fund, but it still isn't turning around, says a brochure that Wegmans provided to workers and local media. And the fund has cut benefit levels twice in recent years, the brochure says.
But union members may have good reason for opposing the Wegmans plan. The union pension fund and the Wegmans Retirement Plan are fundamentally different retirement benefit approaches, says Jim Bertolone, president of the Rochester & Genesee Valley Area Labor Federation.
The pension fund will provide a lifetime benefit based on the numbers of years a worker contributed to it. But the Wegmans Retirement Plan is more like an IRA or 401(k), where the employee and employer contribute to an account, which the employee draws down in retirement.
Wegmans' proposal could also have implications for the statewide Teamsters fund. Years of declines in union membership are part of the reason for the fund's rough shape. In 1976, 23,204 active union members paid into the fund, which provided pensions for 3,657 retirees. Last year, 12,217 workers paid in to fund 16,327 retirees.
For union officials, keeping the fund viable will be increasingly difficult if they can't add active union members or if companies like Wegmans and their union employees pull out.