Wages and Health and Welfare Contributions Changing

Wages and Health & Welfare Contributions Changing on July 1
Effective July 1, TCU Clerical and Carmen Division members working for railroads covered by the National Agreement will receive hourly wage increases of 3.25 percent. This is the final scheduled wage increase under the National Agreement, which extends through December 31, 2004. TCU can serve new wage demands on the railroads in November 2004 not to become effective before January 1, 2005. Cost of living increases will resume July 1, 2005.

Members’ health and welfare cost-sharing contributions will also rise in July from $79.74 to $91.32 per month, although they will be paying an amount less than expected.

The arbitrated agreements implementing the Harris award that settled the last round of bargaining stated that employee cost-sharing contributions for July 1, 2004 would be increased by the lesser of either: a) $20.26 or b) 30 percent of the increase in the Carriers’ 2004 monthly health and welfare payment rate over their monthly payment rate in 2003. Thus, arbitration set the monthly cost sharing for July 1 at a maximum of $100, comprised of the current $79.74 plus, at most, an additional $20.26. However, due to the formula for calculating the Carriers’ increase in health care payments for 2004 — and an agreement with TCU about how to interpret that formula — the lower monthly contribution of $91.32 was finally settled upon.

TCU officers and negotiators for the railroads engaged in detailed and complex negotiations in recent months before arriving at the $91.32 figure. In regard to calculating the increase in the Carriers’ monthly payment rate for employee health insurance, the rate for 2004 for health benefits only (excluding life, vision and dental insurance and on-duty injury medical coverage) was set at $888.87, based upon calculations of the trends in health care cost increases for the National Health Plan. The Carriers’ monthly payment rate in 2003 was $832.50. Thus, the increase in the Carriers’ monthly payment rate was $56.37, and thirty percent of that amount is $16.91. Adding the $16.91 to the current $79.74 contribution would have produced a new monthly cost-sharing contribution for employees of $96.65 for July 2004, in accordance with the formula in the arbitrated agreements.

However, TCU negotiators were also successful in getting the Carriers to agree that the cost-sharing amount would be based strictly on the increased cost to the Plan for TCU Clerical and Carmen members.

For example, TCU compared the cost increase to the Plan for its members versus the members of unions that have not yet settled their contracts and therefore have not adopted any cost-saving provisions. Also, we successfully argued that the Carriers’ 2004 payment rate had been inflated due to certain cost trend assumptions that we felt were not applicable to our Plan.

In a recent letter, International President Scardelletti told Local and District Chairmen that “I advised you back in January 2003 that I was very disappointed in the Harris arbitration award as a whole and most especially with its health and welfare cost sharing provisions. I remain so today.

“However, I am pleased that we were able to trim back the cost-sharing amount for July 1, 2004 below the $100 which many of our members were expecting and below the amount that the formula in the arbitrated agreement would have produced.”

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