Stop 2-Tier Pensions at PG&E

Pacific Gas &Electric Company is attempting to deny full pension benefits to employees who chose to join Engineers and Scientists of California, Local 20 IFPTE. 

Instead of providing the full union pension to these employees, management has proposed to reduce their pensions to a lower amount. 

This is not fair to the employees who organized and joined the union, and it's not fair to other employees who might want to transfer into those positions in the future.  When a 2-Tier system is implemented, it affects ALL employees. 

A fair, quality pension plan is an integral part of attracting and retaining a highly qualified professional workforce.  Long-term employees have worked hard to earn their pension benefits.  They deserve to receive the amount that they were promised by management.

Please tell PG&E management that union members want the same treatment for ALL employees, no matter how much they make or when they joined the union.

Sample Letter for Campaign

Subject: 2-Tier Pensions are Unfair!

Dear [ Decision Maker ] ,

I am very upset about PG&E's actions to reduce pension benefits for employees who have recently joined ESC Local 20.

Two-Tier pensions are unfair, not only to the employees with the lower benefit formula, but to all employees. This could create perverse incentives where experienced employees avoid those departments or job classifications with the lower pension formulas. It would certainly undermine morale in those areas, and across the board.

At a time when PG&E employees, and many ESC members in particular, are making extraordinary efforts to help the company succeed (e.g. Business Transformation Foundational Release), it is not fair and not right for PG&E to punish other employees for unionizing.

Do the right thing, and commit to the same pension formula for ALL ESC-represented employees.

Sincerely,

Campaign Launched:
April 23, 2008


Background Information

Currently ESC Local 20 and PG&E management disagree over how the pension plan should be applied to certain employees. 

ESC Local 20 has consistently maintained that ESC pension formula be applied to all ESC-represented employees.  That formula is 1.5% for the first 25 years and 1.6% for years above 25, times the top rate of pay for the employee's classification (or actual salary if that is higher).  ESC does not accept a two-tier pension system.

 

Management originally proposed that pensions for employees making more than the last line of the "pension band table" receive a pension based upon that amount, not their actual salary.

 

At a meeting on April 10, 2008, management proposed to settle the dispute by applying the ESC formula to the employee's actual salary – but not the top of the rate.  This was not acceptable since it would lead to pension reductions for employees who recently joined ESC from management, where the salary multiplier was higher (1.7%).  It would also be bad for the company and our customers, since it could well trigger a wave of sudden retirements and massive loss of the most experienced professionals in the utility.

 

ESC is already filing for binding arbitration to enforce the pension plan and require the company to follow its commitments and the law. ESC's position is legally solid, and we are confident that we will prevail in arbitration.

 

Here are some documents that clearly reinforce ESC's position:

 

"Effective 1/1/04, the pension formula will be increased to 1.5% of pay for the first 25 years of service and to 1.6% of pay for years of service above 25."

Source: ESC Contract, page vi.

 

"Your basic weekly pay is the higher of:

·         Your straight-time rate of pay for the basic work week as of January 1, not including any temporary upgrade pay, and premium pay, or any benefits of any kinds; or

·         The top rate of pay for your basic classification as of January 1."

Source: Summary of Benefits Handbook for ESC- and IUSO-represented employees 2003, p. 261

 

 

BENEFITS

MGT / A&T

BARGAINING UNIT

Retirement Plan (Pension)

·         1.7 formula using final 36- month rolling average base pay

·         Can retire at 55/35 with no reduction

·         1.5 < 25 yrs service / 1.6 > 25 yrs service formula using top rate of pay of classification held on January 1 of retirement year

·         Can retire at 55/30 with no reduction

Source: "Comparison of Benefits – ESC Neutrality Agreement."

 

This last piece was authored BY MANAGEMENT for the express purpose of describing the difference in benefits for management employees considering joining ESC Local 20.  It makes no mention of the "pension band table" or any maximum pension.  In fact, it describes ESC's position.