Disciplined finance management has paid off
By General Secretary & Treasurer Kim Thompson
Just as you balance your personal checkbook and compare income to expenses in making decisions where to spend and where to save, we at UTU International make similar decisions with your dues.
Accepting responsibility to protect the interests of our members also includes accepting responsibility to use the funds entrusted to the International so as to obtain the most value from every dues dollar received.
There is no silver bullet for managing finances. Resource utilization is regularly assessed and needed adjustments are made. Demanded action is met with a cost-effective response. This same standard is applied to funds managed for the Discipline Income Protection Program and the United Transportation Union Insurance Association (UTUIA).
During the current administration, the UTU’s General Fund, accounting for most day-to-day operations of the International, has increased from $2.1 million to nearly $2.6 million.
The balances of all other funds have improved by an even greater extent, with the total of all International funds increasing from $7.5 million to nearly $16 million — an increase of 111 percent.
The Convention Fund balance assures that necessary funds are available to finance the 11th Quadrennial Convention convening in August.
This is all in spite of reduced membership owing to the deep recession and employee layoffs, and extraordinary administrative and legal expenses.
In 2007, our Discipline Income Protection Program reserve fund suffered a $2 million loss and was left with a balance of just over $5 million. Today, our reserves are at more than $9 million, assuring sufficient funds to satisfy all outstanding liabilities and provide the protection our members expect and deserve.
The UTUIA, meanwhile, earned more than $400,000 from operations during 2010, and remains financially strong with nearly $26 million in surplus.
Union assets are invested primarily in cash accounts and short term bonds, and are largely unaffected by the stock market problems.
The UTUIA, as all insurance providers — and even the Railroad Retirement Trust Fund — has assets invested in the stock market, as well as in bonds and cash accounts. But UTUIA investments are generally conservative in nature. UTUIA investment advice is obtained through independent advisers who have no financial benefit from actual transactions, but are paid on a fee-for-service basis.
Prior to this administration assuming office, it was said that the UTU was broke and could not survive on its own. In addition to precariously low reserves, our nation fell into the worse economic recession since the Great Depression of the 1930s. During the depths of this recession, more than 15 percent of our members were furloughed.
Disciplined finance management by this administration enabled continued growth.
Now, as the railroads recall employees and hire new workers, the resulting increased receipts will add to these reserves, assuring availability of funds for continued quality representation.