Kroger: to Invest USD 56 Million in Houston Associates

Houston / TX. (tkc) The issue of health insurance and pensions is very complicated in the United States. It requires a lot of attention from both employees and employers. There is no obligatory social insurance like in Germany. This would simplify many things and make employees more independent. Instead, many companies have to sacrifice a lot of time to knit the «right» offer for their staff. Moreover, trade unions exert influence on private matters, which does not always end well, as the following example shows:

Kroger Houston has announced details of its recent investment in associates, including USD 56 million in wage increases and steps to ensure access to reliable, affordable health care benefits.

«Kroger’s commitment to increase wages and ensure our associates have access to world-class affordable, secure and reliable health care benefits is a core priority for the company,» said Joe Kelley, president of Kroger’s Houston Division.

Kroger presented its «Last, Best and Final Offer» to the union on August 19. Regrettably, UFCW Local 455 has refused to schedule a vote that would allow their members, the Kroger associates, to vote on the offer.

Kroger’s USD 56 million investment in wage increases and secure, affordable health care benefits for associates comes after many months of negotiations between Kroger and UFCW Local 455.

«Our plan removes any uncertainty frontline associates experience with their current health and welfare trust fund plan,» continued Kelley. «We believe this is the right path forward for our associates.»

Further, UFCW Local 455 has not allowed members to vote on a tentative agreement that would improve the security and stability of past and future pension benefits by moving to a new variable annuity pension plan (VAPP) which would include a nearly USD 1 billion investment by Kroger. UFCW Local 455’s failure to allow a vote on the pension proposal holds both parties back from enhancing the security of pension benefits of thousands of Kroger Family of Companies associates who are also UFCW members across the country.

Facts about the Investment in Houston Associates according to Kroger

  • Every frontline Houston associate will receive an increase in pay over the next six months
    • This additional wage increase follows wage increases earlier this year and USD 8 million in wage increases in October 2019
  • Kroger Houston will spend more than USD 75 million annually on health care for hourly associates
  • Kroger Houston associates will pay just USD 32 for individual coverage or USD 172 for family coverage each month in a company-administered plan
    • By comparison, the national average per month for individual coverage is USD 103 and USD 501 for family coverage – according to the Kaiser Family Foundation Employer Health Benefits Summary of Findings, 2019.
  • Kroger has offered to invest nearly USD 1 billion to improve the stability and security of past and future pension benefits for 33,000 associates across 14 divisions – including Houston meat clerks. Establishing a new variable annuity pension plan (VAPP) is the most effective way to do this.

Associates’ health care coverage is transitioning to a company-sponsored plan from their current South-Central Health and Welfare Fund. Kroger believes the South-Central Fund is unstable because it significantly reduced benefits in 2019 for Kroger associates. This move to a company-administered plan is a critical step in ensuring stable, affordable and secure benefits for Kroger Houston associates now and in the future.