Kroger workers ratify deal keeping pension plan

Kroger and its 10,000 cashiers, stock crews, meat cutters, deli helpers and other Louisville-area workers who belong to the United Food and Commercial Workers Local 227 overwhelmingly ratified a contract Tuesday that preserves an increasingly rare pension plan that is 100 percent funded by the grocery chain.

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

“Kroger is thrilled that we’ve reached this agreement,” spokesman Tim McGurk.

Wages will increase about 2 percent annually over the life of the four-year pact. That will increase the range of pay across all job classifications from $6.60 to $17 an hour to $7.50 to just below $20 an hour, Best added.

Healthcare benefits remain the same, with workers maintaining their weekly contribution to fund health care at $5 per week for an individual, $10 for married couples, and $15 weekly for family health care insurance.

Instead of defined pension benefit plans, employers increasingly favor 401(k) plans, said Adrian Hartshorn, a financial strategist for Mercer, a global human resources consulting firm with offices in Louisville.

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

“With a defined benefit plan, the cost will go up and down depending on how the stock market performs,” Hartshorn said.

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