UPS claims proposed Central States benefit reductions illegal - Business Insurance
The company, which withdrew from the $17.8 billion pension fund as part of a collective bargaining agreement with the International Brotherhood of Teamsters at the end of 2007, might also be required to pay between $3.2 billion and $3.8 billion in benefit payments if the benefit reduction is approved by the Treasury Department.
A “backstop agreement” in that CBA stated that in the event “at some point in the future if Central States ever lawfully cut benefits to that group, UPS would provide a supplemental retiree benefit,” UPS spokesman Steve Gaut said. “As a result of that backstop agreement now, we are potentially liable for a future payment to those (UPS) employees that are retirees that are eligible, associated with what that benefit cut turns out to be,” Mr. Gaut said.
The company, which withdrew from the $17.8 billion pension fund as part of a collective bargaining agreement with the International Brotherhood of Teamsters at the end of 2007, might also be required to pay between $3.2 billion and $3.8 billion in benefit payments if the benefit reduction is approved by the Treasury Department.
A “backstop agreement” in that CBA stated that in the event “at some point in the future if Central States ever lawfully cut benefits to that group, UPS would provide a supplemental retiree benefit,” UPS spokesman Steve Gaut said. “As a result of that backstop agreement now, we are potentially liable for a future payment to those (UPS) employees that are retirees that are eligible, associated with what that benefit cut turns out to be,” Mr. Gaut said.