UFCW 3000 has addressed the problem with processing new pension applications with Zenith, who administers the Sound Pension Plan Trust. They are addressing the backlog of applications and have apologized for the delays. Thank you to the members who contacted us about critical issue. Zenith has issued a letter apology that we are posting here.
UFCW 21 and Teamsters 38 members joined together in 2019 to ratify a new contract and reform the pension. This is the second in a series of member educational calls, where we are joined by national pension experts, to answer member questions. Partly as a result of this successful work to secure our pension, we can focus more on the goal of raising wages in the upcoming 2022 Grocery Store Worker Contract Negotiations.
Great news for your retirement benefits. We wanted to share some fabulous news: after more than a decade of work, as of July 1, 2021, we have secured our retirement plans and their future funding is more solid than it has been in a very long time.
What is a retirement pension? We all hope to retire after a lifetime of work with enough income to live with dignity and some degree of independence. While relatively few people these days have a monthly pension that is paid for life, it is something that we have been able to keep in place for our union grocery store workers. A solid retirement plan is made up of many sources: personal savings, Social Security and retirement/pensions and investments. Your retirement pension from your work at the grocery store is one of these sources.
This path to secure our retirement benefits under the Sound Retirement Trust (SRT) required many steps for the employers and the unions and over the last year we have continued to push forward along that path. Some of you may be near retirement after decades of work while others may have started at the grocery store in just the last few years. Whatever your situation, your pension is one of the most important ways to have income when you retire. Your employer begins making payments into your pension when you are hired, and you become vested in the pension plan typically after just 5 years of work in the stores.
While grocery store workers have successfully fought to keep our pensions under the SRT, for nearly twenty years it has had funding problems caused by two large economic crashes (in 2000 and 2008) and long-term changes in the industry. In 2019 our union bargaining team secured a tentative agreement to turn that around and members approved that plan at vote meetings. We have been working hard ever since to move through all the steps to implement this approved agreement. On July 1, 2021, we completed the final step to secure the pension funding.
As a result of our pension agreements and the changes described below, the SRT will become what is called “Green Zone” status and will stay in the green zone for the foreseeable future.
Under the 2019 bargaining, three changes were made to help secure your retirement benefits:
For Kroger Employees:
• All the benefit liabilities for all benefits earned for your work before July 1, 2021, under the SRT will be transferred to the UFCW Consolidated Fund. Kroger will contribute to the Consolidated Fund to pay for all of these liabilities within 7 years.
• When you retire, your pension benefits for your work before July 1, 2021, will be paid by the UFCW Consolidated Pension Fund.
For Other Employees:
• The current SRT will remain in place and continue to be funded for your work before July 1, 2021. The SRT will continue to get a regular contribution from your employer for every hour you work in the future.
• When you retire, your pension benefits for your work before July 1, 2021, will be paid by the SRT.
• For All Employees under 2019 Bargain:
• Future retirement benefits for your work on and after July 1, 2021 will be in one new fund called the Sound Variable Annuity Pension Plan (VAP).
• The Sound VAP will continue to get a regular contribution from your employer for every hour you work. The Sound VAP is sending you a notice about how the VAP works. Below are some basic rules about the VAP. When you retire, your will receive one check for your work before July 1, 2021 (from SRT or Consolidated Fund) and one check from the VAP.
Finally, all of your service credited and covered employment under the SRT and the VAP are counted under the other plan for all eligibility provisions. This ensures that you do not lose vesting or become ineligible for benefits under the SRT as a result of these changes. This includes eligibility for benefit options and the time periods for applying and determining qualification for a pension or disability benefit, participation and vesting purposes.
In the past, large or drastic declines in the stock market where the pension investments were made, resulted in reductions in the value of the SRT’s funding and reduction to the early retirement and other benefits. To help insulate grocery store workers’ future benefits from these drastic swings, the Variable Annuity Plan (VAP) is structured with a built-in safety mechanism so the benefits provided will track the VAP funding levels.
When the VAP’s investments in the stock market are doing well, and there are returns of over 8.5%, that extra money is required to go into the rainy-day fund reserve account, called a stabilization reserve. In a year where the returns from the pension plan’s investment drops below 2%, the benefits paid under the VAP are shored up with money from this stabilization reserve. The stabilization reserve also will be funded with an additional $15 million in 2022.
The “variable” part of the plan comes into effect with the returns are between 2% and 8.5%. For returns that are between 2 % to 5.5%, there can be adjustments downward in benefits. For years with returns greater than 5.5% up to 8.5%, there can be adjustment upwards. With these safeguards and adjustments, the VAP should stay fully funded in all market conditions and the benefits increase over time as wages increase. Long term, returns are expected to be at or over 5.5%.
In 2019 and prior contract negotiations, months of time and effort were spent to negotiate agreements for tens of millions of dollars to try to address pension funding. While we will still need to negotiate contribution rates from the employer each bargain, with a healthy SRT and the security of the VAP, it is anticipated that the SRT and the VAP should not be underfunded again. And because we continue to manage our Health and Wellness Plan so well, we hope to maintain the Health Plan with no changes and no increased costs.
Now that we have successfully addressed the pension and health benefits, we can take the time and energy of the bargaining team with the employer representatives and focus on the member’s top priorities: 1st and foremost increased wages, and also look to other improvements in the contract for training, staffing and additional ways to improve the workplace.
The amount someone gets at retirement depends on many things. If you have a question about your specific pension benefits, when you are vested, or other topics, please call our grocery store workers’ retirement plan administrator, Zenith, at 206-282-4500 or 800-225-7620, press option 2, then press option 3.
If for some reason, you don’t get a call, you can dial into the Town Hall. On Monday September 27 at 4 PM just dial 1-888-231-5462 and enter meeting ID 6308. Hope to talk with you then.
Background:
It’s Your Retirement
We all hope to retire, after a lifetime of work, with enough income to live with some dignity and independence. A solid retirement plan will help. It has many sources: personal savings, Social Security, and retirement/pensions and investments. Your retirement pension from work at the grocery store is one of these sources.
While some of you may be near retirement after decades of work, others may have just started at the grocery store in just the last few years. Whatever your situation, your pension is one of the most important ways to have income when you retire. Your employer begins making payments into your pension when you are hired, and you become vested in the pension plan typically after just 5 years of work in the stores.
Good News
1 – A Solid Plan, a Brighter Future – In the Summer of 2021 our Pension made a very positive announcement – we were able to complete the final step to secure the pension funding after many years of effort. This includes a new plan that: is more resilient to the ups and downs in the stock market; creates a Stabilization Fund for years when the investment returns drop below 2%; and, connects your employer’s retirement contributions to your wage instead of a fixed amount so that as you get paid more, your retirement value goes up as well.
2 – Solution Allows for Shifting Focus to Higher Wages – Every three years our union members get the right to negotiate with the employers over the terms of employment – wages, benefits, working conditions and more. This includes Health Care and Retirement benefits. Because we have successfully addressed the pension and health benefits over the last decade, our hope is that as we go into contract negotiation in early 2022, we can now take the time and energy with the employer representatives to focus on members’ other top priorities: first and foremost is increased wages. We are also looking forward to trying to make improvements in the contract for training, staffing and additional ways to improve safety and respect in the workplace.
Need to Know Details About Your Pension
The amount someone gets at retirement depends on many things. If you have a question about your specific pension benefits, when you are vested, or other topics, please call our grocery store workers’ retirement plan administrator, Zenith, at 206-282-4500 or 800-225-7620, press option 2, then press 3.
On Thursday, March 11, President Joe Biden signed the COVID relief bill into law. This will provide millions of workers and families with the urgent relief they need as the COVID-19 pandemic continues.
Relief Payments: Provides $1,400 in relief payments per person for individuals making less than $75,000 and married couples making less than $150,000. along with additional tax relief for working families with children.
Childcare: Includes $15 billion for the Child Care and Development Block Grant and allows those funds to be used by essential workers.
COVID Testing and Vaccine: Provides funding towards testing, contact tracing, PPE, and vaccine distribution.
Health and safety: Provides $200 million for pandemic-related worker protection activities at the Labor Department, half of which would go to the Occupational Safety and Health Administration (OSHA) to support OSHA enforcement and worker training in high-risk sectors such as meat processing, health care, correctional facilities and agriculture.
Extends unemployment benefits: Extends pandemic-related unemployment assistance that was set to expire on March 14, including the current $300 supplement to unemployment benefits, for another six months through Sept. 6. Provides that the first $10,200 of unemployment benefits received by taxpayers making less than $150,000 will not be subject to federal taxation.
Retirement Security: Strengthens the entire pension system by helping pension plans that are in danger of failing.
All seminars are conducted on-line over Zoom. Once registered you will receive a confirmation email and a Zoom meeting invitation.
Register in advance for this meeting: After registering, you will receive a confirmation email containing information about joining the meeting.
Register in advance for this meeting: After registering, you will receive a confirmation email containing information about joining the meeting.
Register in advance for this meeting: After registering, you will receive a confirmation email containing information about joining the meeting.
We have big news -- a major step in implementing the bargained deal has been approved. One year ago, our union bargaining team secured a tentative agreement for a path forward to secure our pensions for years to come and the membership approved that at our contract vote meetings. We have been working hard ever since to move through all the steps to implement this and have just finished one of the last hurdles.
This is very exciting news for all of us who want to have a solid and secure pension and to be able to have the opportunity in the future to improve benefits. The last steps are the approval by the Pension Benefit Guaranty Corporation (the PBGC is the federal agency that oversees these transactions) and the creation of the new Variable Annuity Plan (VAP), discussed in detail at contract vote meetings last year and overwhelmingly approved by the membership at those votes. The application to the government was filed at the beginning of November and the creation of the new VAP is in process. Stay tuned and read below for more details on the new pension plan.
More information
Some of you may be near retirement after decades of work while others may have started at the grocery store in just the last few years. Whatever your situation, your pension is one of the most important ways to have income when you retire. Your employer begins making payments into your pension when you are hired, and you become vested in that pension plan typically after just 5 years of work in the store.
Tip: The amount someone gets at retirement depends on many things. If you have a question about your specific pension benefits, when you are vested, or other topics, please call our grocery store workers’ retirement plan administrator, Zenith, at 206-282-4500, press option 2, then press option 3.
For decades, grocery store workers have stood strong and gotten the employer to pay contributions to the Sound Retirement Trust to fund our pensions. However, in the past 20 years, there have been economic crises from the Dot Com Stock Market Crash in 2000 to the real estate bubble crash of 2008 and COVID-19. There have also been changes in the grocery store industry over the last generation that created challenges and pressures on our pension plan.
The good news is that, despite all these economic challenges and the changes in our industry, in 2019, we were able to negotiate with Kroger and Safeway/Albertsons to agree to make substantial investments into our pension benefits. These agreements secured hundreds of millions of dollars of support from the employers to both stabilize the Sound Retirement Trust and create a new style of plan that limits the impacts of ups and downs in the stock market on your pension benefits. As part of the support to the Sound Retirement Trust, Kroger has agreed to have a portion of our plan join a multiemployer plan with membership from multiple other UFCW locals. This action will reduce the Sound Retirement Trust funding needs and secure our pensions.
There were several factors that put us in a positive position to be able to achieve this agreement. Two of the most important were: 1) improving wages of all workers as a result of the higher state minimum wages and our higher pay rates in our contracts; and, 2) having a large surplus of tens of millions of dollars in funds in our health care plan through our focus on free preventive care and wellness. This allowed us to increase the employer funding of our pension benefits without impacting our health care plan benefits.
This path to secure our pension plan required many steps for the employers and the unions (we co-manage the pension plan) to complete and over the last year we have continued to push forward along that path. And in early November 2020, we took two big steps toward realizing these goals to support and stabilize our plan’s future: 1) our proposal to transfer a part of the benefits earned under our Sound Retirement Trust Pension to the Consolidated Pension Fund was approved on 11/11/2020 by the Consolidated Fund. The Consolidated Fund is where our members in the Kroger Meat pension were transferred in 2010; and, 2) our application to complete this pension deal was filed with the PBGC.
There now begins a 120-day period for the PBGC to review our application and decide about approving our application to move the Kroger liabilities and assets from the Sound Retirement Trust funds over to the Consolidated Fund. This will improve the funding status of both plans. The goal of the transfer is to pool our retirement funds with fourteen other UFCW locals across the United States, making our pension benefits more secure. This will put our plan in Green Zone status, enabling us to have the opportunity to negotiate improvements to benefits that have not been allowed for years under the law because our plan needed to improve its funding.
Moving forward, there will be two pension plans in place. The current Sound Retirement Trust will remain in place and continue to be funded. The new plan for future benefits will be a Variable Annuity Plan (VAP), the plan recommended by our grocery store worker bargaining team, discussed in detail at Grocery Store Bargaining Kick Off in 2018 and in detail at the contract vote meetings last year, and overwhelmingly approved by the membership at those votes. A VAP is designed to adjust up and down each year based on investment returns.
What is critically different now is that returns greater than 5.5%, up to 8.5%, can be used to increase benefits for the first time since 2010. If the VAP achieves lesser returns than 5.5%, benefits could be adjusted downward. Any returns above 8.5% will help boost a stabilization reserve that will be part of the VAP and will be funded with $15 million to start in order to help prevent reductions in benefits in the event of returns below 2%. With these safeguards and adjustments, the VAP should stay fully funded in all market conditions and the benefits increase over time as wages increase.
Another Bit of Advice: Planning ahead is about more than just the money.
Retiree Barbara Rhodes – former UFCW 21 grocery store worker from QFC and bargaining team member "It's wonderful to have retirement but I'd say to all grocery store workers, have a plan. I wish I'd known twenty years ago what I know now. I don't just mean financially. I mean what you plan to do with yourself. Develop interests and those things when you're still young. And use your full health benefits before you retire too. I met with the Sound Health mental health counselor and they were very helpful. And protect your body, take your breaks and you'll be happier when you retire and are not as worn out as I was.”
A couple years ago we made several goals for our pension, and we have made great strides to achieve those goals based on our union’s collective work, standing together for a secure retirement, and making practical and important decisions. Here is a sample of what we have accomplished so far:
Accelerate funding and secure those benefits that have already been earned.
Approve a Variable Annuity Plan (VAP) design with the following elements:
Defined benefit plan offering a life-time benefit.
Benefits adjusts annually up or down based on investment performance.
The VAP’s investments will be more conservatively invested so extreme movements up or down are minimized.
Funding is always in balance and avoids underfunding risk.
Workers have opportunity to earn benefit increases as wages go up over time.
Creates a stabilization reserve of assets to be used to reduce risk to pensions during any future downturn.
Negotiate a long-term pension funding agreement.
Position ourselves so that as we go into the next round of negotiations in 2022 we have largely addressed the underlying issue with the pension so we can better focus on negotiating improvements to wages and other working conditions.
Want to learn more about your pension – especially if you are less than 5 years away from retirement? Please come to our next round of pension trainings with the Sound Pension Trust. We plan to hold a member retirement education training after the decision of the PBGC comes through and will update members on the details of the date and time of the training after that PBGC decision has been made.
While a pension is a good thing for workers, our pension, like many other pensions in our country needs significant changes if it is to continue to provide financial security for us into the future. ..
Read MoreWe are the Union. The members of UFCW 3000 are over 50,000 members working in grocery, retail, health care, meat packing, cannabis, & other industries across Washington state, north-east Oregon, and northern Idaho. UFCW 3000 is a chartered member of UFCW International with over 1.4 million workers in North America.
To build a powerful Union that fights for economic, political and social justice in our workplaces and in our communities.
