Area Kroger workers ratify contract

Defined-benefit pensions to remain

*By Jere Downs*
jdowns@courier-journal.com/

Cashiers, stock crews, meat cutters, deli helpers and other Kroger workers who belong to United Food and Commercial Workers Local 227 in the Louisville area have overwhelmingly ratified a contract that preserves an increasingly rare pension plan.

"We got it for everybody," Local 227 President Gary Best said in a telephone interview yesterday, adding the deal required a 40 percent funding increase to maintain pension benefits. "That was a core issue."

The local, which represents more than 11,000 employees of the supermarket chain, gave ground on pay increases to maintain the pension plan, Best said. Wages will increase 2 percent annually over the four-year pact. That will increase the range of pay across all job classifications, now at $6.60 to $17 an hour, to $7.50 to nearly $20 an hour, he said.

Health-care benefits will remain the same, with workers maintaining their weekly contribution at $5 for individual coverage, $10 for married couples and $15 for family insurance.

"Kroger is thrilled that we've reached this agreement," company spokesman Tim McGurk said.

Employers increasingly favor 401(k) plans that draw a contribution from the worker and often the employer, said Adrian Hartshorn, a financial strategist for Mercer, a global human-resources consulting firm with offices in Louisville. Those have largely replaced traditional plans that pay a set benefit.

For employers, the average cost of a 401(k) plan is lower, he said. More important, that cost is fixed annually.

Recent labor agreements illustrate how employers are moving away from defined-benefit pension plans.

At Ford, the new labor agreement allows the automaker to hire new workers who will receive access only to a 401(k) plan, not the defined-benefit pension that current employees will receive.

During the Kroger talks, both sides agreed the company would contribute 40 percent more to the pension plan to continue current retirement benefits, Best said.

That kind of consensus is increasingly uncommon, Hartshorn said.