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C O N T R A C T O V E R V I E W 17 P A C I F I C M A R I T I M E A S S O C I A T I O N Enhanced arbitration system to lead to more-stable waterfront Once unknown to most outsiders, the waterfront grievance procedure gained notoriety during the 2014-15 contract talks; without a contract in place, employers had no access to the arbitration system, and the result was a series of ILWU slowdowns and work-stoppages that crippled productivity. Previously, during contract periods, individual arbitrators have typically decided disputes on the waterfront – ruling, for example, on whether a particular action is an illegal slowdown. Now, as a result of the new contract, a new arbitration framework will be in place – one that employers believe will lead to greater consistency of rulings up and down the coast. Please see page 20 to learn more. Wages and pensions rise for ILWU workers Over the five-year term of the contract, the ILWU base wage is rising from $35.68 to $42.18 per hour – an average annual increase of 3.6 percent. Already, a majority of registered workers earn more than $100,000 per year as a result of bonuses, guarantees and other unique features of work on the waterfront. (To better understand ILWU wages, please see page 54.) Under the new contract, the number of workers earning six-figure incomes is expected to grow. Both the 2002 and 2008 contract agreements featured large pension increases, more than doubling the maximum annual benefit from $39,900 to $79,920. The latest contract increases the maximum benefit to $88,800 per year by 2018, an average annual increase of 2.2 percent. Health care changes foster greater efficiency, cost containment ILWU workers have access to one of the nation's finest health care plans, with nearly unlimited coverage and minimal cost to workers. These benefits will continue, with workers still paying zero premiums, zero deductibles or co-pays for in-network services and receiving prescription drugs for a $1 co-pay (or zero if by mail order). At the same time, recent administrative changes that have saved the plan more than $100 million will continue. These savings are largely due to greater scrutiny of out-of-network charges, which are ripe for fraud, waste and abuse. Please see page 18 to learn more. To learn more about two key issues, please turn the page. Building on Past Contracts A snapshot of major contract provisions follows: F ollowing recent negotiations that gave employers the right to bring technology (2002) and automation (2008) to the waterfront, the 2014-15 contract talks produced an equally important outcome: designing a more robust arbitration system that will foster the implementation of these earlier agreements to greatly enhance waterfront productivity. Already, employers have spent billions of dollars on automation projects now in operation and under construction in Southern California; by providing greater predictability, the new system will make it much easier to expand these efforts. $