John Jordan, a baker's union rep with local 334, says back in November of 2010 employees agreed to send 28 cents of their 30 cents-an-hour wage increase into the pension plan. Less than a year later - the company said it couldn’t afford to pay into the pension plan anymore. At first, employees were told that was temporary - but the company never again paid into pensions.
Hostess CEO Gregory Rayburn said, quote: "Whatever cash the company had was being used to fund the business.” Hostess has repeatedly said the company couldn't afford to maintain its pension contributions and suspended them in August of last year.
In response to union claims that hostess was stealing wages to fund the financially unstable company - Hostess issued a statement saying, in part: “Over the course of several decades, various labor bargaining units for hostess brands' employees negotiated the right to convert portions of their future wage increases to pension contributions. Once the bargaining units exercised these rights, such future amounts became permanent pension contributions that were separate and distinct from wages."
The baker's union says employees are hopeful that the pension fund will recover some money in court - but they're not expecting much.
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