August 14, 2002
RICHMOND, Va. - To settle a 12-day strike, Dominion (NYSE: D) Wednesday offered the union that represents its electric workers a five-year contract proposal that provides a better pension plan than their current contract.
The company's strike settlement offer also includes the same improvements in medical, dental and vision care made previously. Guaranteed annual pay raises would total nearly 15 percent over the life of the contract, bringing the average base wage to more than $51,000 before overtime, supplements and shift differentials. The difference between this salary increase proposal and the previous one of 16.5 percent would be used to fund an enhanced early retirement supplement. When combined with the existing supplement, a veteran employee could receive up to $50,000 in additional retirement funds.
"For the past few weeks, the union leadership and striking employees have asked us to improve their retirement. We appreciate the unique retirement needs that many of our employees have because of the physically demanding nature of their work. The plan we presented today includes a better retirement package than they presently have, while the total offer remains in line with the pay and benefits of our other 13,000 union and non-union employees," said Edgar M. Roach Jr., president and chief executive officer of Dominion Virginia Power.
The International Brotherhood of Electrical Workers Local 50 and Dominion began negotiating a contract in late January. The 3,700 employees represented by the union began a strike Aug. 2. Dominion has been able to maintain smooth operations during the strike through the use of salaried employees and contractors.
The offer made Wednesday differs from the one made Aug. 1 in two key retirement areas:
- An enhanced early-retirement supplement. When combined with the current supplement, employees who retire between 55 and 62 with at least 30 years of credited service by 12/31/02 would receive an additional $600 a month until they become eligible for Social Security. The pension formula remains unchanged from the previous contract.
- Retirees would continue to have their medical premiums paid in full by a fund into which the company would contribute $5 million, the same as in the previous offer. The fund would pay for about 16 percent of the annual medical premiums of retirees with 30 or more years of service. The company would pay the remaining 84 percent. Consistent with the union's request, the annual "Success Sharing" incentive payment would be shifted into the retirement package.
The proposed pay increases exceed the current inflation rate. Base pay raises would be 2.75 percent annually in the first four years of the contract and 3 percent in the fifth year. By comparison, the inflation rate was 1.1 percent during the last 12 months. The raises will total 14.8 percent compounded over five years. By comparison, the inflation rate over the last five years was 12.2 percent.
"We have heard from many members of the union recently that the strike is not about pay increases, but about retirement benefits. We believe this offer addresses the workers' concerns while still providing for adequate pay raises," said Thomas F. Farrell II, chief executive officer of Dominion Energy.
IBEW Local 50 represents workers at Dominion Virginia Power and Dominion North Carolina Power, which delivers electricity to more than 2 million customers, and Dominion Energy's power stations in Virginia, North Carolina and Mt. Storm, W.Va. The workers represented include meter readers, linemen and power station operators.
Dominion is one of the nation's largest producers of energy, with a production capability of more than 3 trillion British thermal unit of energy per day. Dominion also serves 3.8 million franchise natural gas and electric customers in five states. For more information about Dominion, visit the company's Web site at www.dom.com.
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