After reaching accords with five other United Food and Commercial Workers (UFCW) unions earlier this month, Stop & Shop said UFCW Local 1500 in New York has ratified an agreement for a $229 million investment in member pension benefits.
In announcing the deal late Friday, Quincy, Mass.-based Stop & Shop said the company will end its participation in the UFCW Local 1500 Pension Fund and transition member employees to the Local 1500 Annuity plan, a variable annuity-based pension program (VAPP). The supermarket chain, part of Ahold Delhaize USA, said the move is “intended to sustainably provide future retirement benefits.”
The agreement covers about 8,000 current Stop & Shop workers who are members of Westbury, N.Y.-based UFCW Local 1500. The local is New York’s largest grocery union with more than 20,000 members overall, including from such retailers as King Kullen, D’Agostinos, Gristede’s and Shop Rite, besides Stop & Shop.
“We’re pleased this agreement has been ratified, as it will improve the security of future retirement benefits for our union associates, while reducing financial risk going forward,” Stop & Shop President Gordon Reid said in a statement. “This represents a significant investment in our associates who are dedicated to serving our communities every day.”
On Dec. 1, Stop & Shop announced a $667 million investment in pension benefits after UFCW Locals 1445, 1449, 328, 371 and 464A ratified a plan to withdraw from the UFCW International Union-Industry Pension Fund to the UFCW and Employer’s Variable Annuity Pension Plan, formed with The Kroger Co. The pact covers about 18,000 Stop & Shop workers in the five UFCW locals.
Under the deal with UFCW Local 1500, Zaandam, Netherlands-based Ahold Delhaize said Stop & Shop will pay the Local 1500 Plan withdrawal liability of $225 million to fulfill chain’s obligations for past service for associates and retirees in the 1500 Plan. In addition, Stop & Shop expects to pay $4.1 million to the defined contribution plan for transition benefits to certain plan participants near retirement. Going forward, the retailer said Stop & Shop members of UFCW Local 1500 will receive retirement benefits via an existing defined contribution plan.
Overall, Stop & Shop operates more than 400 supermarket in Massachusetts, Connecticut, Rhode Island, New York and New Jersey.