Cost of Dockworkers' Benefits Higher Than Shippers Expected

Staff Reporter

The generous pension and benefit packages enjoyed by International Longshore and Warehouse Union members have long been the envy of other union locals in L.A. County.

But cost projections just released by the Pacific Maritime Association show the eye-popping extent of the gains won by dockworkers in the six-year agreement signed in January.

By the time the agreement expires in July 2008, steamship lines serving the West Coast ports represented by the PMA will be contributing at least $548 million annually in pension and health benefits to the 10,500-member union.

That's the cost of guaranteeing $42,000 per member in annual health benefits, and $62,000 per year in pension for dockworkers with at least 35 years' experience.

"The overall (ILWU) benefits package is really the class of the labor movement," said Peter Olney, associate director of the University of California Institute for Labor and Employment. "The medical, dental and optical plans are unrivaled as far as anything I've seen."

Though the agreement was made in January, cost projections weren't released by the PMA until this month, after actuarial analysis was completed. The overall cost of the benefits package could wind up higher than the PMA anticipated when it made the deal, PMA officials said.

Under current assumptions, employer contributions for health benefits will jump to $400 million in the 2007-2008 fiscal year, from $235 million for the year ended June 30, and $148 million for pensions, up from the latest year's $23 million.

Dockworkers with 35 years of service were guaranteed $39,900 per year in pension before the new contract already higher than many other blue collar unions.

Costs could rise

Whether the PMA can limit its actual costs under the agreement to even those projections remains to be seen. The health care package was based on projected hikes in insurance costs of 15 to 20 percent annually during the first three years of the contract and 10 percent annually during the final three years.

But PMA officials acknowledge that the health care plan alone could end up costing $500 million during the final year of the contract.

"We keep getting (insurance company) projections that are higher than our assumptions," said Michael Wechsler, the PMA's chief financial officer. "We just can't believe the numbers would turn out to be that high. But we've negotiated an obligation so of course we have to pay it."

Among the ILWU's perks: Steamship lines pick up all health care costs except for the $1 dockworkers pay for each prescription filled.

By comparison, other area unions have garnered noticeably less for their employees.

At the International Brotherhood of Electrical Workers Local 11, which represents 7,000 L.A. workers, a 25-year career can net an annual pension of $27,600 to $30,000. IBEW members each get $8,058 in health benefits annually.

"It's considered one of the better plans in the country," said Marshall Goldblatt, Local 11's assistant business manager.

United Food and Commercial Workers Union Local 770's 30,000 L.A. region-based grocery clerks, meat cutters and meat packing workers can earn up to $24,000 in pension, plus a lump sum of $30,000 to $40,000. Those workers get an average of $7,883 in health coverage.

Grocery workers make much less than dockworkers: a maximum $7.40 per hour for food baggers and a $19.18 ceiling for meat cutters.

"If you take out the health and pension programs, we become an average union as far as the rest of the contract," said Rick Icaza, president of the local chapter.

A member of the International Association of Machinists Local 1930, which covers 3,500 city of Long Beach employees, would receive an annual pension of $40,000 retiring with 25 years' professional experience at age 60.

The city contributes $6,420 in health benefits annually for each IAM member.

When told of the ILWU's package, Kevin Boyland, Long Beach's human resources director, said: "That's remarkable. I don't know what else to say about that."

Early in contract talks last year, the PMA the bargaining arm of the steamship lines proposed reducing the level of health benefits.

That proposal was quickly taken off the table, but the PMA held firm in its opposition to the union's demands for a 57 percent increase in pay and pension benefits. The union wound up with smaller increases.

Funding the health benefits required a six-year contract instead of the usual three years.

Other issues, such as technology and job-for-life guarantees, led to a 10-day shutdown of the ports last fall. In the end, PMA Chief Executive Joe Miniace sympathized with the union on the pension plan.

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