Kroger Pension Vote Details

Who does this apply to?

UFCW Local 400 members working at Kroger under our West Virginia contract and Kroger meat cutters working under our Roanoke contract.

What is the IVAP and why does it need changes?

The Industry Variable Annuity Pension, or IVAP for short, is your pension plan. IVAP was created in July 2020 and total Kroger contributions were expected to remain at the same level as made to the separate National Pension Fund. However, contributions to IVAP have been much lower than expected due to decline in active participation and significant benefits cuts are possible unless we ratify an agreement to extend the MOU through June 30, 2033.

What is the Extended Memorandum of Understanding (MOU)?

The Extended Memorandum of Understanding, or MOU for short, is a tentative agreement between the union and the employer outlining proposed changes to the pension plan. The MOU does not take effect unless a majority of members vote to accept the changes.

What does the MOU do?

• Extends the existing agreement through June 30, 2033
• Preserves the existing non-Grandfathered Nominal Accrual Rate of 27.5% of contributions
• Guarantees from Kroger that there will be no further reductions in that accrual rate for the term of the Extended MOU

What is happening with grandfathered benefits?

Due to a decline in contribution levels, the Grandfathered benefits under the IVAP are being eliminated effective for work performed on and after July 1, 2025. The Grandfathered benefit is being eliminated regardless of whether the MOU is extended through the ratification process. The elimination is not retroactive – accruals already earned will not be affected by this change.

Who is eligible for grandfathered benefits?

The Grandfathered benefits provided the same rate of accruals as provided under the National Pension Fund for participants who on June 30, 2020 were either at least age 55 with at least ten years of service under the National Pension Fund or who had 20 years of service under the National Pension Fund regardless of age.

Examples:

• If your current accrual is $30, your accrual going forward will be $24 (= $30 x 80%)

• If your current accrual is $50, your accrual going forward will be $40 (= $50 x 80%)

• If your current accrual is $70, your accrual going forward will be $56 (= $70 x 80%)

What will Kroger be required to do?

• Pay additional contributions necessary to make up for any shortfall.
• Guarantee that benefits will not be reduced below the current 27.5% Nominal Accrual Rate.
• Protect against future benefit cuts after members ratify extending MOU through June 30, 2033.

What happens if the Extended MOU is NOT ratified?

• If the extended MOU is NOT ratified by September 30, 2025, pension plan participants will have their Nominal Accrual Rate decreased to 22% of benefit bearing contributions effective October 1, 2025.
• The 22% Nominal Accrual Rate will remain in effect for any participants that do NOT ratify an extended MOU by June 30, 2026.
• If the extended MOU is ratified after September 30, 2025, but before July 1, 2026, the nominal accrual rate will go back up to 27.5% for months after ratification.

What is the impact of your vote on Extended MOU?

Here’s an example:

Jane has at least 10 years of service, combined, under this IVAP plan and the National Pension Fund.  Her accrual rate has always been 27.5% of benefit bearing contributions since the start of the IVAP. The benefit bearing contribution rate for Jane is $90/month.

• Scenario 1: Vote YES on Extended MOU – Jane will accrue a monthly Nominal Accrual Rate benefit from the plan of $24.75/month (calculated as $90.00 × 27.5%).

• Scenario 2: Vote NO on Extended MOU – Jane will accrue a monthly Nominal Accrual Rate benefit from the plan of $19.80/month (calculated as $90.00 × 22%).

What is the impact of a “NO” vote on Extended MOU?

• Groups that had an Appropriate Unit Contribution Rate (AUCR) of under $3.25 under the National Pension Fund as of June 30, 2020 received a subsidy to preserve a floor benefit equal to 80% of the benefit under the National Pension Fund.
• This subsidy goes away July 1, 2025 and is replaced with a commitment by Kroger to make increased contributions to preserve the 80% floor benefit going forward.
• These increased contributions are subject to ratification of the Extended MOU.
• To obtain 80% floor benefit protection, groups that had an AUCR of under $3.25 must ratify the Extended MOU by September 30, 2025.
• If ratified by September 30, 2025, Kroger will make increased contributions retroactive to July 1, 2025 to preserve the 80% floor benefit as of that date.
• If the Extended MOU is ratified after September 30, 2025 but before July 1, 2026, the 80% floor benefit is protected with increased contributions only after the date of ratification.
• If no ratification happens by June 30, 2026, there will be no 80% floor benefit protection for these groups.

How can I learn more?

Join us for a Tele-Town Hall on Monday, August 25, 2025, at 4:00 p.m. where we will review the proposed pension changes in detail. You can also contact us directly to get answers to your questions before voting.

Join us for a Tele-Town Hall on Monday, August 25, 2025, at 4:00 p.m. where we will review the proposed pension changes in detail. You must register to attend the Tele-Town Hall by completing the form below.