Union Cries Foul over Threat to Pension Plan

The labor union for Maryland’s Superfresh grocery employees is protesting an effort by the bankrupt company to withdraw from a pension plan that covers retirees across the state.

The protest comes as Superfresh’s corporate parent, Great Atlantic & Pacific Tea Co., or A&P, nears the end of its Chapter 11 bankruptcy proceeding in a New York court. As part of the bankruptcy, A&P last year of its Maryland Superfresh stores and eliminated about 1,500 jobs .

Now, according to court documents, the grocery chain wants to withdraw from the pension plan covering the Maryland workers, leaving a financial hole that could amount to more than $76 million.

The move has the president of Towson-based United Food & Commercial Workers Local 27 crying foul.

Union president George Murphy Jr. stated in court documents filed last week that the A&P move came as a surprise to the union. A&P never raised the issue during extended negotiations last year over the closing of stores, or in talks about the continued operations of two remaining Maryland Superfresh stores in Ocean City, he stated.

Murphy’s statement came as part of a Jan. 24 motion by the Sparks, MD-based Food Employees Labor Relations Association (FELRA) and United Food and Commercial Workers Pension Fund, which are separate legal entities from Local 27. The two organizations asked bankruptcy Judge Robert Drain to turn down A&P’s latest financial recovery plan until the pension issues are settled.

Neither Murphy nor FELRA President William R. Jensen returned messages seeking additional comment.

A&P spokeswoman Mary Connor said only that the company planned to respond soon with a new filing in the bankruptcy court.

According to the FELRA/Pension Fund court motion, the financial issue at stake is an estimated $76,846,816 amount in “contingent liability claims” that A&P might owe if it were allowed to withdraw from the fund.

Under pension law, an employer that participates in a retirement plan like FELRA cannot withdraw unless some accounting is made for the money that has already been promised to pensioners and future retirees.

The FELRA court motion did not provide an estimate of how many former Superfresh employees are receiving pensions, but A&P subsidiaries have been active in Maryland since the 1930s, and the UFCW has been involved in administering the pension program for decades.

It was not immediately clear whether A&P’s intention to withdraw from FELRA would have any financial impact on the pension payments currently being received by Superfresh retirees, or payments to any future pensioners.

Other supermarket companies involved in funding the FELRA pension plan are Giant Food and Safeway .

Late last year, lawyers for Giant’s parent company Ahold USA complained to Judge Drain that A&P’s bankruptcy plan could increase Giant’s pension costs. According to grocery industry newspaper Supermarket News, the judge will hold a hearing on that complaint Feb. 4.