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December
2009
Dear Sisters and Brothers:
As you now know from the
Participant Notice (also called a 204(h) Notice) that you recently received,
the Pension Plan has been certified by our actuary as being in critical status,
or in the “red zone”. Accordingly, the
Pension Protection Act of 2006 (“PPA ‘06”) requires the Trustees of pension
plans in the “red zone” to develop a plan that is designed to improve the
financial position of the pension plan over a period of time, which is referred
to as a Rehabilitation Plan.
The Trustees of your Pension
Plan have approved a Rehabilitation Plan, which meets the requirements of PPA
’06. This Rehabilitation Plan includes
five schedule options—four Alternative Schedules and the Default Schedule—that
outline benefit and contribution changes.
These schedules will be presented to the bargaining parties for review,
and one will be approved and implemented as part of any future collective
bargaining agreement.
It is important to note that
the benefit reductions under the PPA ’06-mandated Default Schedule are more
severe than those proposed by the Trustees as part of the Alternative Schedules
under the Rehabilitation Plan. In the
event the bargaining parties cannot agree on one of the Alternative Schedules,
however, the Default Schedule must be implemented. The Trustees took proactive steps to ensure
the viability of this Pension Plan in an effort to keep deep benefit cuts off
the table. These changes do not ensure
that more changes may not be required in the future. They do, however, take corrective action
while control is still in the hands of the Trustees.
Please keep in mind that our
work is not done. These changes,
disappointing as they are, were vital and fiduciarily responsible. As we approach the contract negotiations with
your Employer, additional work is needed.
Our local union must secure an additional $.33 per hour paid to restore
our fund, thereby halting any further changes. This needed money is in addition to the $.75
per hour payment currently in our contract.
The formula is based on all hours paid for both full and
part-time members, including overtime. The 2008 hours for which Stop & Shop
contributed was equivalent to 10 million hours.
We know your Employer is among the industry leaders and in fact had
their best year in 2008, thanks in part to you, but we have to be cautious
during our negotiating process. It is
our belief that while we will be able to correct the pension shortfall, it will
come with a price probably reflected through wage increases.
Additionally, our Health and
Welfare plan will be viewed by your Employer as an area for them to seek
economic relief. Our Health Fund is
financially stable and currently pays approximately $24 million in
benefits and with an additional $3 million in the Prescription
benefit. We would prefer not having to
negotiate any further costs to you, however, your Employer may have different
ideas.
We want to stress the need to
understand that during these lean economic times, negotiations will be
difficult, however, if you maintain your good work and trust in us, we are
confident that a new contract can be achieved continuing to provide an adequate
standard of living for all.
Our first negotiating session
is scheduled for January 7, 2010 and we will attempt to provide you with
updates whenever possible.
In unity strength, in
division W-E-A-K-N-E-S-S.
Sincerely and Fraternally,
Mark A. Espinosa James
R. Wallace, Jr President Secretary-Treasurer
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