Pharmacists Negotiations Update: June 8, 2015

June 2015



After 24 straight hours of bargaining and going to the very top of the company, a tentative agreement was reached early Saturday morning to restore your frozen defined benefit pension plan!

The pension will be unfrozen effective July 1, 2015 for all pharmacists – full-time, part-time and per diem – who were hired into a pharmacist bargaining unit position before January 1, 2014. This accounts for about 96% of all pharmacists working today.

Though an enormous accomplishment, it does come at a cost, for both pharmacists and all Coalition union members. To restore the pension, we agreed that pharmacists hired into a bargaining unit position on or after January 1, 2014 and all future hires will not participate in the defined benefit pension but rather will remain in the Pharmacists Defined Contribution (PDC) Plan. In addition, pharmacists’ wage increases over the next three years will be 0% on October 1, 2015, 1% on October 1, 2016 and 2% on October 1, 2017. These increases are less than what other Coalition union members will be receiving, but were necessary to get Bernard Tyson, the Kaiser CEO, to agree to the pension restoration. You should know that restoring the pension adds $630 million back to Kaiser’s pension liabilities. This truly is a monumental accomplishment – nowhere in the U.S. today does a company add back hundreds of millions of dollars in pension liability after having recorded the savings. Though the smaller wage increases were difficult to accept, years from now when you retire with a secure, risk-free pension, you will most certainly reap the benefits of this agreement.

In addition to your wage sacrifice, the Coalition accepted a change we would never have agreed to otherwise – we agreed to move from a $5 ER co-pay to a $50 ER co-pay in order to get your pension back. Furthermore, UNAC/UHCP agreed to forgo certain other improvements that were most certainly available to keep the negotiations on track and to accomplish your number one stated goal in these negotiations.

It was truly a great display of union solidarity – 28 local unions from seven different internationals, representing 105,000 Coalition union members stood strong for 1,400 pharmacists who just joined the Coalition. I can honestly say that what occurred on Saturday morning was the proudest moment of union solidarity that I have witnessed in my 25 years in the labor movement.

Please remember this is a tentative National Agreement. We have to finish your local contract negotiations and you have to vote to accept the contract. Nothing is final until you vote on all the tentative agreements that will constitute a complete new contract.

Below are some additional details of what was negotiated during this round of national negotiations. We are also putting together a lengthy FAQ that we expect to get out soon.

Pension Restoration
The pension will be unfrozen effective July 1, 2015 for all pharmacists – full-time, part-time and per diem – who were hired into bargaining unit position before January 1, 2014. This accounts for about 96% of all pharmacists working today. You will not earn pension credited service for the period you were in the PDC, but you will keep the existing monies from the PDC. All pharmacists hired on or after January 1, 2014 into a bargaining unit position will remain in the 6% PDC. And, all pharmacists regardless of date of hire will continue to receive the 1.25% employer match for the Tax Sheltered Annuity (TSA).

Retiree Medical
A new retiree medical plan, with no cap, was negotiated. It will become effective January 1, 2017, but will not be implemented until 2028, meaning that nothing changes until 2028. Current retirees are not affected, grandfathered employees not yet retired are protected and not affected, and pharmacists who retire with early pension eligibility before January 1, 2017 will not be affected. The new plan features a premium subsidy and a HRA funded at $2,000 per year of service, with a $10,000 reload at age 85. More details will follow over the next several weeks, but rest assured we have negotiated a new benefit that keeps retirees whole from a financial perspective for decades into the future.

Dental Benefit
Under the new National Agreement, the Delta Dental annual benefit will increase from your current $1,000 to $1,500, effective January 1, 2016. In addition, the lifetime orthodontia benefit also increases from the current $1,000 to $1,500 per child.

Tuition/CE Reimbursement
Tuition/CE reimbursement will increase from $2,000 to $3,000 per calendar year, of which $500 can be used for travel related expenses. As a Guild member, the $2,000 reimbursement only applied to college tuition, not CEUs. As a LMP-represented member, you will now have the ability to use the entire amount for CEUs. This reimbursement is separate from your education leave, which is currently 24 hours. We intend to negotiate education leave improvements in local bargaining.

Jury Duty
Jury duty paid days will change from 30 days to unlimited.

I want to thank your negotiating team. They played a crucial role in making this all happen – their continued presence throughout Thursday, Friday and well into Saturday morning solidified the Coalition’s resolve to stand with you. After spending the entire night in the hotel lobby, they then had to analyze the pension restoration conditions and decide to agree with them. The negotiating team always had the best interests of the entire bargaining unit at heart, and I believe the decisions they made prove that to be true.  They did remarkable work on behalf of all Southern California pharmacists.


Please register for Pharmacists Negotiations Update on Jun 10, 2015 6:30 PM PDT at: https://attendee.gotowebinar.com/register/137799960340548865

Please join us for this important webinar. We will be updating everyone on the latest tentative agreements, including restoration of your pension, the new retiree medical plan, and other improvements.

After registering, you will receive a confirmation email containing information about joining the webinar.

In solidarity,
Bill Rouse
Chief Negotiator