Friday, August 19, 2005

Questions on Union Contracts.

Some Questions and Answers on the Union Contracts.

Have the union contracts cost the parish any money?
No, the employees pay their own union dues and the parish pays into the union pension fund from money, approximately $63,000, returned to the parish by the Bishop in 2002 when he terminated the diocesan lay pension fund. At the present time there should be over $12,000 still in that fund.

Why did the employees at Holy Spirit Parish sign a contract with the United Farm Workers Union, UFW?
One of the reasons, besides job security, that employees at Holy Spirit Parish signed a contract with the United Farm Workers Union (UFW) was to get a pension. The Bishop terminated the lay Pension Fund in 2001. He did set up a 403(b), like a 401(k). However, employees over 40 would receive 30-50% less from the 403(b) upon retirement, with a good market, than what they would have received under the old pension fund.

What’s the difference between a 403(b) and a pension fund?
(The 403(b) is different than a pension fund in that it is dependent on the market. A pension fund, on the other hand, guarantees a certain monthly payment for life starting on retirement, and to the surviving spouse if the worker dies. This payment is not dependent on the market. Those of you who watch the market know the market has not done well in the last few years.

Where did the money come from after the Bishop terminated the lay pension fund?
When the Bishop terminated the lay pension fund millions of dollars were left over after he paid it out according to the IRS formula. He returned some of the money to each parish and diocesan institutions. He publicly told people that each pastor could do with this money what they wanted to do. One priest asked, "Can I give it back to the employees?" The Bishop responded, "You can do with it what you want. If you want to put a new roof on the church, or if you want to give it back to the employees, that is your decision."

How much did Holy Spirit Parish receive back and what did they do with it?
At Holy Spirit Parish the finance council, chaired by Conrado Alvarado, and the Pastoral Council, chaired by Dora Saavedra, advised Fr. Jerry Frank to place that money, approximately $63,000, into an account to pay into the UFW pension fund for the employees under contract. He took their advice. As of the end of June 2005, $51,000 has been expended. That leaves approximately $12,000 still left in that account.

Why did the employees sign a five-year contract? Isn’t that unusual?
UFW requires a five-year vestment, meaning that the employee must be under contract for five years in order to receive a pension fund when they retire. That is why a five-year contract was signed. The only exception is for an employee who turns 65 years of age before the five years. That employee is automatically vested.

What kind of pension will the employees be receiving?
For employees who have worked here for a number of years, $1/hour, or $2080/year are placed in the pension fund. This guarantees $500 a month for life at retirement. That’s a pretty good return on the money.

Does everyone have $1 per hour placed into the pension fund?
No, everyone is not getting $1/hr contribution. The amount placed into the pension fund is dependent on the number of years of employment at the parish. So, newer employees may only have 25 cents per hour placed into the pension fund. This rewards those workers who have worked many years at their job. The contribution increases in accordance with the number of years worked.

Are there any other paybacks at retirement?
The UFW will also pay $5 per month for every year a person has been employed at the parish, up to 15 years, even if those years have not been under contract. So, if an employee worked 10 years, they would receive $50 per month for life, plus their monthly pension. If they worked 15 years they would receive $75 per month for life, plus their monthly pension.

Why are some people saying that the Union has cost the parish money?
This issue is very complicated, but it is important to know that the union contract has not cost the parish any money and no money from any parish operating funds has been used to date to pay pension funds or union dues.

“Please join us and other workers in a Labor Day Pilgrimage this Labor Day, Monday, September 5, 2005, beginning at 8 a.m., at Archer Park in McAllen and walking to San Juan’s Shrine of Our Lady of San Juan.” Complete details under our previous post "Labor Day Pilgrimage" at left.

Note: If you would like to contribute a posting or a comment to this site, please send it to:, with "Holy Spirit" in your title line. You may also e-mail this article to a friend, simply by clicking on the little envelope icon below!