Giant Food will improve security of future pension benefits for union associates and reduce its financial risk.
The leading retailer serving the greater Washington D.C., area has begun the New Year on a conciliatory note with a major labor union: Giant Food and United Food & Commercial Workers (UFCW) Locals 400 and 27 have fully implemented the parties' pension security agreement that union members ratified on March 5, 2020.
As part of the agreement, Giant Food will make a $800 million investment in past and future pension benefits for its members.
"We're pleased that this agreement has now been implemented. By making this significant investment to help stabilize and secure pensions for our associates, we feel that we are doing the right thing for our employees who are dedicated to serving our customers day in and day out," said Ira Kress, president of Giant Food.
Parent company Ahold Delhaizeindicated that the agreement will have no impact on its previously issued 2020 financial outlook, thanks to its strong year-to-date financial performance through its third quarter of fiscal year 2020.
As part of the agreement, the following actions will occur:
Giant Food's current pension plans, known as the Food Employers Labor Relations Association (FELRA) and UFCW Pension Plan and the Mid-Atlantic UFCW and Participating Employers Pension Plan (MAP), will be combined into one plan for past pension benefits.
Giant Food associates represented by UFCW Locals 400 and 27 will participate in a new Variable Annuity Pension Plan intended to sustainably provide future retirement benefits and reduce financial risk to the company.
The agreement covers approximately 18,000 current Giant Food associates who are members of UFCW Locals 400 and 27.
Giant Food's agreement with UFCW Locals 400 and 27 comes after news of other grocery chains withdrawing from the UFCW International Union-Industry Pension Fund. Most recently, Kroger agreed to pay the National Fund withdrawal liability of $962 million, on a pre-tax basis, to meet obligations for past service for associates and retirees. The Stop & Shop Supermarket Co. LLC, sister banner to Giant Food, and Albertsons Cos. Inc. have also each entered into separate agreements with the UFCW local unions to withdraw from the National Fund.
In other labor news, food retailers and unions have recently clashed on the subject of employee bonuses during the COVID-19 pandemic. For example, in August, UFCW President Marc Perrone participated in a CNN op-ed directed at America's largest grocery chains, specifically naming Kroger, Albertsons and Amazon-owned Whole Foods and condemning the CEOs of these companies for cutting hazard pay during the pandemic. In September, UFCW launched a national campaign to restore hazard pay for America’s 3 million grocery workers.