Kroger to Invest $56 Million in Houston Associates

Rhea-AI Summary

Kroger Houston announced a significant commitment of $56 million to increase wages for associates and improve health care benefits. This investment follows prolonged negotiations with UFCW Local 455, which has yet to schedule a vote on Kroger's proposed offers. The company also plans to enhance pension benefits with a $1 billion investment aimed at transitioning associates to a more stable variable annuity pension plan. The health care coverage will shift from an unstable fund to a company-administered plan, offering lower premiums compared to national averages.

Positive

• Kroger is investing $56 million in wage increases for associates.
• The company will provide affordable health care coverage at $32 for individual and $172 for family plans.
• A proposed $1 billion investment aims to enhance the security of pension benefits for 33,000 associates.

Negative

• UFCW Local 455 has not allowed a vote on Kroger's wage and pension proposals, potentially stalling negotiations.
• The transition from the South-Central Health and Welfare Fund highlights its instability, which affected benefits for associates.

HOUSTON, Nov. 5, 2020 /PRNewswire/ -- Kroger Houston has announced details of its recent investment in associates, including $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 (Kroger associates) to vote on the offer.

Kroger's $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 $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 Kroger's Investment in Houston Associates:

• 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 $8 million in wage increases in October 2019
• Kroger Houston will spend more than $75 million annually on health care for hourly associates
• Kroger Houston associates will pay just $32 for individual coverage or $172 for family coverage each month in a company-administered plan
• By comparison, the national average per month for individual coverage is $103 and $501 for family coverage *
• Kroger has offered to invest nearly $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.

To learn more, please visit: www.krogerhoustoncba.com.

*According to the Kaiser Family Foundation Employer Health Benefits Summary of Findings, 2019.

About The Kroger Co.
At The Kroger Co. (NYSE: KR), we are Fresh for Everyone™ and dedicated to our Purpose: To Feed the Human Spirit®. We are, across our family of companies, nearly half a million associates who serve over 11 million customers daily through a seamless shopping experience under a variety of banner names. We are committed to creating #ZeroHungerZeroWaste communities by 2025. To learn more about us, visit our newsroom and investor relations site.

About Kroger Houston
The Kroger Houston Division operates more than 100 stores in SE Texas and Louisiana and employs over 18,000 associates. Last year, Kroger Houston donated $1.9 million to local non-profit organizations and schools and donated 2.6 million pounds of food to local food banks through its #ZeroHungerZeroWaste initiative.

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SOURCE The Kroger Co.

FAQ

What is Kroger's investment for Houston associates?

Kroger is investing $56 million in wage increases for its Houston associates.

How will health care benefits change for Kroger associates?

Kroger's new plan will provide associates with health care coverage at significantly lower premiums compared to national averages.

What is the new pension plan proposed by Kroger?

Kroger aims to introduce a variable annuity pension plan with a $1 billion investment to enhance pension benefits.

Why is UFCW Local 455's decision significant for Kroger associates?

The union's refusal to hold a vote on Kroger's offers may delay critical wage and pension improvements for associates.