Members of two United Food & Commercial Workers locals in the Washington region reached a collective bargaining agreement with Safeway Inc. on Wednesday that guarantees full funding of pension benefits for current employees and retirees.
A similar agreement was also reached with Giant Food of Maryland, which in February reached a tentative agreement.
Union officials said that the more contentious Safeway agreement, ratified by local members hours before a planned strike, was one of very few agreements guaranteeing pensions.
Both contracts call for nearly $75 million in additional pension contributions over the four-year period to shore up the local FELRA/UFCW pension fund, which had $352 million in assets and $1.7 billion in liabilities and was 20.8% funded as of January 1, 2018.
The prospect of the pension fund’s insolvency became a major sticking point during contract talks. Union officials insisted that the company had committed in a previous negotiation to fully fund the pension benefits if the plan wound up at the Pension Benefit Guaranty Corp. and participants’ benefits were reduced. Safeway officials disputed that point.
Safeway, a division of Albertsons Cos., is controlled by private equity firm Cerberus Capital Management.
The contract negotiations “were long and unusually complex due to the difficult pension issues we needed to resolve,” UFCW Local 400 President Mark Federici said in a statement. “This would not have been possible without a united union membership willing to take a stand for the fair contract they have earned.”
A Safeway official said the company was pleased to have reached an agreement with UFCW Local 400 and Local 27.
“The agreement was unanimously ratified by our employees,” Beth Goldberg, a senior manager with Safeway’s Eastern Division, said in emailed statement. “We are grateful to our team that diligently worked with the union to make today a success.”
Source: Pensions & Investments