Majority of Local 1-2 Members Vote for New Contract
August 29, 2012
By Marc Bussanich, LaborPress City Reporter
It’s been a month since Local 1-2 members of the Utility Workers Union of America returned to their jobs as a result of Governor Andrew Cuomo intervening to help end the Con Edison lockout of 8,500 union members. On August 15 the members returned their mail-in ballots that contained their vote for approval or disapproval of a new four-year contract.
Harry Farrell, Local 1-2’s President, said that about 93 percent of the membership voted in favor of the new contract.
According to Farrell, the union was able to beat back some of the company’s demands, such as freezing wage increases for four years for workers earning top rate pay and a $157 weekly health care contribution. But the union did concede on the defined benefit contribution. Whereas current workers will retire with a defined pension benefit, new workers hired after July 1 will instead receive their retirement monies via a cash balance plan.
But Farrell noted that in the context of today’s economic climate, only 10 percent of companies offer their workers a defined benefit plan compared to 30 years ago when 80 percent of companies funded their workers' pensions.
On the U.S. Department of Labor’s website, a “cash balance plan is a defined benefit plan that defines the benefit in terms that are more characteristic of a defined contribution plan. In other words, a cash balance plan defines the promised benefit in terms of a stated account balance.”
In an interview, Farrell said, when asked what he'd say to a younger worker who might say that he'd have preferred a defined pension benefit than a cash balance plan, “I would say to that worker that you do have a pension, a different pension than what the older workers have. I’d explain to him the percentages he’ll receive over his working career via the cash balance plan and the 100 percent contribution matching from the company into his 401(k) plan.”
Farrell added, “So it’s not that he lost his pension. He does have a pension that’s called a defined contribution pension. The only difference is that the risk is on the worker, depending on the stock market. If the market does great 30 years from now, the new worker won’t have to worry about that.”
The new contract calls for, as noted, a cash balance plan for new hires. They will receive contributions from Con Ed during the time they’re working for the company. For example, Con Ed will contribute four percent of a worker’s salary whose under the age of 35 years. For workers between the ages of 35 and 50, they will receive a five percent company contribution, six percent for workers between the ages of 50 and 65 and seven percent between the ages of 65 and older.
On the wage front over the course of the four-year contract through 2016, workers will receive a two percent increase combined with a $1,200 cash bonus (equates to about a 3 ½ increase), 2 ½ increase combined with a $600 cash bonus (equates to a 3 percent increase) and three percent increases in the third and fourth year. Also, rather than paying $157 per week for health care benefits, Local 1-2 members will contribute a maximum of $89 towards their medical coverage through 2016.
On the night of July 26, Farrell sat in the room with his colleague, UWUA’s President Michael Langford, Con Edison’s CEO Kevin Burke and none other, Governor Cuomo. When asked what it was like being in the same room with New York’s governor, Farrell said, “I found out one thing. When the Governor walks into the room, he commands its. We were under a lot of pressure to get this contract done and that’s what we were able to do with the Governor’s help.”
Farrell also noted that the Governor applied an equal amount of pressure on both himself and Burke as opposed to the Governor exerting all the pressure on the union to reach a deal.
While it might be easy to say that the union conceded on the pension issue, one can’t underestimate the pressure and duress Farrell, or any other union leader in a similar circumstance, underwent on the night of July 26.
“I had to look at the entire situation. From July 1, the day of the lockout, we experienced no less than three heat waves, but there were no power outages. During the almost four-week lockout, the company lost only a transformer in Bensonhurst. I had to make a decision on whether I was going to keep my people out, who were going to lose their medical coverage on August 1. I had to make a decision that was best for our members. I’m glad I made that decision,” said Farrell.
While the company can’t bring up the pension issue for the next seven contracts, or 28 years, the company will no doubt seek concessions when the current contract expires in 2016, although Farrell is hopeful to win higher percentages for new hires’ cash balance plans.
“You can ask the company for anything you want, whether or not they give it to you is another thing because they have the disease of ‘No.’ The company was looking to freeze wages for four years for our members currently receiving top pay, but we were able to beat them back. So, all in all, I think it was a great contract that we got.” firstname.lastname@example.org