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UPS restructures pensions, sees charge of $896M
NEW YORK | UPS said Friday that it is restructuring pension liabilities for about 10,200 of its workers, and that it will book related costs of nearly $900 million in the third quarter.
The world’s largest package company said it has reached a deal with the New England Teamster and Trucking Industry Pension Fund that creates a second pension plan pool. This will allow UPS to be responsible only for its own employees’ pensions and freeze its liability in the original multi-employer pension plan.
Under the agreement, United Parcel Service Inc. employees won’t see a reduction in their pension benefits, and UPS won’t be required to increase cash contributions for 10 years.
The Atlanta company said the charge of $896 million represents the present value of its $2.1 billion withdrawal liability from the original pool, which it will pay over the next 50 years.
The move is subject to approval by local unions. If approved, the withdrawal will be effective Sept. 16.
• From wire dispatches and staff reports