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Old 05-12-2009, 03:20 PM   #1  
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Joined APC: Feb 2005
Position: UPS 767 Captain, SDF Z
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Default UPS, IPA Memorandum of Understanding Q&A

UPS, IPA Memorandum of Understanding Q&A - May 8, 2009

The following information is provided to help you answer questions about the recently signed Memorandum of Understanding between UPS and the Independent Pilots Association. The MOU gives the IPA approximately four weeks to obtain commitments from our line crewmembers that will allow UPS to avoid the furloughing of any pilots.

Q: Does the MOU change the contract between UPS and the IPA?
A: No. The MOU does not change any provisions of the contract. The MOU does outline temporary, supplemental rules that will apply only to crewmembers who volunteer for one of the savings programs outlined by the MOU.

Q: Will any crewmembers be forced to volunteer?
A: No. The programs are completely voluntary.
MOU Allows Pilot Group to Determine Whether or Not There will be a Furlough-Furlough Protection Periods Given in Return for Savings Generated-Furlough Could be Prevented Through April of 2010; April 2011; or until April 2012 Depending on Savings Generated

Q: What are the targets that must be met in order to avoid furloughs? Q: How long will the furlough protection be in effect?
A: The MOU outlines several cost savings targets which will trigger furlough protection for a given period of time.

Q: Is this a legally binding agreement?
A: Yes. Assuming the voluntary program nets $40 million in savings through Dec. 31, 2009, there can be no furlough of crewmembers before April 1, 2010.

Q: Is there any circumstance under which the company can move forward with furloughs in spite of the agreed to cost savings having been met?
A: Yes. No one can predict the state of the economy this far into the future. As such, the MOU can be cancelled after January 1, 2010. The savings programs would cease at that time.

Q: Are these savings targets realistic?
A: Yes. If crewmembers commit to these programs as indicated on the previous surveys, savings generated should prevent a furlough at least through the second year, April 1, 2011.

Q: Will the MOU prevent downgrades of captains to first officers?
A: No, but it will mitigate the number of crewmembers downgrading. Even with the MOU, downgrades are still likely because of displacement bids. However, these will be fewer in number and will not be as disruptive as if a furlough of 300 members were to occur.

Q: What are the voluntary programs crewmembers can choose to participate in?
A: There are seven voluntary programs.
  • Long-term leave of absence,
  • short-term leave of absence,
  • incentivized military leave of absence,
  • job sharing,
  • reduced guarantee bidding,
  • and three early retirement options
Q: Are there incentives for crewmembers to take an unpaid voluntary leaves of absence (VLOA)? A: All VLOAs come with the following benefits which are in addition to what the contract now provides: company paid, continued health care coverage while on leave (crewmember contributions continue as per Article 6.G.); all other benefits and accruals including sick leave, vacation, and longevity continue as if crewmember actively on property (sick, vacation paid out). Defined Benefit Pension plan years of service accruals continue as if crewmember actively on property.

Q: How does the long-term VLOA function?
A: Crewmembers can volunteer to take a long term unpaid leave of absence from three up to fourteen bid periods starting between bid periods 09-05 and 11-04. Leave can be in one or multiple blocks provided each block contains at least three consecutive bid periods.

Q: How does a crewmember sign up for a long-term VLOA?
A: A bid will be published by Wednesday, May 7, 2009 and be open until 8:00 a.m. EST on May 26, 2009. The bid was delayed by one day while the parties worked some details.

Q: Is the company required to award a long-term VLOA?
A: Although the Company intends to make a large amount of leave time available-the amount of leave approved will vary according to equipment type. Volunteers will indicate their preferences. Preferences will be awarded in accordance with the following criteria: 1) preference will be given to those requests that generate the most savings; 2) preference will then be given to those requests with the earliest leave start date; 3) preference will then be given based on seniority.

Q: Can a crewmember change his or her mind later once they bid and have been awarded a VLOA?
A: No. Bidding and being awarded a VLOA is as serious as bidding a schedule or bidding a position. If the Company could not count on the leave actually being taken, there would be no incentive for the program in the first place.

Q: Can the Company cut short a crewmember's awarded long-term VLOA?
A: No. Once awarded, the crewmember is entitled to the benefits of the entire awarded long-term VLOA.

Q: What are short-term VLOAs and how do they work?
A: Short-term VLOAs are leaves for one or two consecutive bid periods. These leaves will be awarded by seniority, by fleet, seat, and domicile.

Q: How does a crewmember sign up for a short-term VLOA?
A: Short-term VLOAs for 2009 will be bid and awarded in conjunction with the long-term VLOAs. How Short-term VLOAs for 2010 will be bid is yet to be determined.

Q: Where can I find a detailed set of rules governing all VLOAs?
A: Please review the Voluntary Job Protection MOU, paragraphs 1.a., b., and c.

Q: What is an Incentivized Military Leave?
A: Members of the armed services are entitled to take military leave at any time in accordance with the law. The MOU, however, provides additional benefits - beyond those required by law or contract - if crewmembers take their military leave in accordance with rules spelled out in paragraph 2 of the MOU. We have also agreed to extend the window of protected military leave beyond the five year limit provided by law.

Q: How does a crewmember initiate taking an incentivized military leave?
A: Those crewmembers who satisfy the following criteria will receive the additional benefits provided by the MOU:
  • Notify the company of their intent to take a military leave of absence by 8 a.m. EST, May 26, 2009.
  • Take a military leave of two months or more
  • Start leave anytime between April 29, 2009 and end prior to bid period 11-07.
  • Since a definitive set of orders for the entire period of expected military leave is often not feasible, the MOU has been amended to allow as sufficient a letter from a commanding officer outlining the dates of the intended leave.
Q: What are the incentives for taking a military leave pursuant to the MOU?
A: The incentives are the same as for the VLOAs, including: company paid, continued health care coverage while on leave (crewmember contributions continue as per Article 6.G.); all other benefits and accruals including sick leave, vacation, and longevity continue as if crewmember actively on property (sick, vacation paid out). Defined Benefit Pension plan years of service accruals continue as if crewmember actively on property.

Q: Can a crewmember return from a Military Leave earlier than originally indicated?
A: Yes. Federal law provides this protection.

Q: What is voluntary job sharing (JS)?
A: Job sharing is one of the voluntary programs that allow two crewmembers to partner to share a bid line and split the pay for that line. The pair may bid for any number of bid periods between 09-05 and 11-07. Both crewmembers receive full-time benefits provided each crewmember earns at least 37.5 hours pay and credit in the bid period.

Q: How does JS work?
A: The senior member of a JS pair bids for both volunteers. The JS pair is awarded one line and they decide how that line will be divided. JS crewmembers sharing a regular or VTO line shall each receive compensation based on one-half of the guarantee (37.5) or one-half of the total credit value of the awarded line, whichever is greater. JS reserve line and standby line holders who exceed the 37.5 guarantee will be paid for their actual pay and credit not to exceed what the reserve or standby line would have generated if flown by one crewmember. Additional pay and credit generated by revisions, premiums, training, and per diem will be paid to the operating crewmember. Revision of the entire line premium will be divided equally between the JS pair.

Q: What is reduced guarantee line (RDG) bidding?
A: UPS identify VTO lines on a given fleet as RDG lines and such lines will be constructed from dropped vacation, open time, and training in accordance with the contract. RDG VTO lines will be constructed from a minimum guarantee of 37.5 to a maximum pay credit of 60 hours per pay period. These VTO lines will be bid by RDG volunteers and awarded on a seniority basis.

Q: How do I volunteer for either the JS or RDG programs?
A: By May 13, 2009, UPS will make available a form that crewmembers must fill out in order to volunteer. This form must be completed and returned to UPS by 8 a.m. EST, June 2, 2009 (i.e. after the awarding of voluntary personal leaves; early retirements and military leaves). The company will then make the awards in seniority order by fleet, seat, domicile, each available JS or RDG volunteer slot. Volunteers may indicate which bid period(s) they are available for JS or RDG.

Q: Are there other rules governing the JS and RDG programs?
A: Yes. Crewmembers who are interested in either program should carefully review the MOU paragraphs 3.a., b., and c.

Q: What about jumpseating privileges for crewmembers who have volunteered for one of the cost saving initiatives?
A: Crewmembers participating in JS, RDG, military or short-term VLOAs will continue to have jumpseat privileges. Crewmembers on long-term leave may jumpseat with the permission of the Chief Pilot's office.

Q: Are there early retirement incentives provided by the MOU?
A: Yes. There are three incentivized early retirement options that may be taken in accordance with the MOU.
Early Retirement Option A
Crewmembers with at least five vesting years and are between the ages of 55 and 60 will be allowed to retire with their full A-Plan benefit (Defined Benefit Pension Plan) with no actuarial reduction as outlined in Article 15.D.7. of the contract. Crewmembers seeking to take advantage of this option must fill out a form and submit it to the company no later than 8 a.m., May 26, 2009. Crewmembers electing this option must retire between June 1 and August 31, 2009.
Early Retirement Option B
Crewmembers who will be age 60 or older by August 1, 2009, may voluntarily retire with one additional year of service credit under the Defined Benefit Pension Plan. Crewmembers seeking to take advantage of this option must fill out a form and submit it to the company no later than 8 a.m., May 26, 2009. Crewmembers electing this option must retire between May 24 and August 1, 2009.
Early Retirement Option C (Added 5/7/2009)
Crewmembers turning 55 years of age at any point from September 1 through December 31, 2009, will now be allowed to retire and receive the benefits of MOU early retirement option A (no actuarial reduction in benefit.)
Crewmembers turning 60 years of age at any point from August 1 through December 31, 2009, will also now be allowed to retire and receive the benefits of MOU early retirement option B (extra year of service credit.)

Q: Will we be able to extend these early retirement options into 2010?
A: There is no agreement to extend the early retirement options until 2010

Q: May age 65 and older flight engineers on the retiring DC-8 fleet take advantage of Early Retirement Option 2?
A: Yes. All crewmembers age 60 or older by August 1, 2009, may voluntarily retire as outlined above with this additional benefit.

Q: What happens if I complete a MOU election form and a UPS Retirement Plan retirement application with a June 1, 2009 retirement date and then the MOU is not effective because sufficient savings were not identified?
A: Once you receive your UPS Retirement Plan benefit payment, under the plan terms, your retirement is irrevocable even though the MOU is not effective. Your benefit amount will be that under the current Retirement Plan terms. If you want to retire only if the MOU becomes effective, you should not select a retirement date that precedes that event.
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