UPS, Teamsters to Restructure New England Pension Plan

Discussion in 'UPS Pressroom News' started by cheryl, Aug 24, 2012.

  1. cheryl

    cheryl I started this. Staff Member

    UPS (NYSE: UPS) today announced an agreement with the New England Teamsters and Trucking Industry Pension Fund (NETTI) to restructure pension liabilities for approximately 10,200 UPS employees.

    The agreement reflects a decision by NETTI's trustees to establish a second pension plan "pool" to make it more attractive for new employers to join the Fund. Such a structure is designed to allow employers to assume responsibility only for their own employees without regard to any previous Fund liabilities. For UPS, this structure allows the company to freeze its liability in the original pool, establish its payment obligations and move UPS employees into the new pool.

    UPS will record a one-time charge of $896 million in the third quarter. This charge represents the present value of the company's $2.1 billion withdrawal liability from the original pool, which it will pay over the next 50 years. Subject to approval by local unions, the withdrawal will be effective Sept. 16, 2012.

    In addition, UPS and NETTI have agreed to a contribution rate for future accruals designed to ensure UPS employees do not see a reduction in their pension benefits and the company will not be required to increase cash contributions for 10 years.

    "UPS's goal when considering any change to participation in a multi-employer pension plan is to safeguard the pensions earned by our employees in a cost-effective manner," said John McDevitt, UPS's senior vice president of human resources and labor relations. "This transfer will remove uncertainty associated with this plan for our people while being fair to the company and our investors."
  2. bmwmc

    bmwmc Active Member

    Holy Sheet!
  3. UnsurePost

    UnsurePost making the unreadable unreadabler

    posted about this many times in the last year, a little surprised it is happening "now" but whatever. The last I checked a few months ago, the plan was 41% funded or something like that.
  4. undies

    undies Active Member

    I don't get it, it makes sense for a company like Ford or GM to need to restructure their pension plans since they're in the red or barely making profit. How can a billion dollar company need to worry about this?>
  5. upssalesguy

    upssalesguy UPS Defender

  6. Mystakilla

    Mystakilla Who the *$#@ cares.

  7. Monkey Butt

    Monkey Butt Dark Prince of Double Standards Staff Member

    A little bit of advice sir, don't go into business for your self.
    You probably don't have what it takes.:wink2:
  8. Sammy

    Sammy New Member

    For UPS, this structure allows the company to freeze its liability in the original pool

    This statement does not sound good if you have 30 years of service today. When the original pool is drained of its assets UPS is not legally liable to pay for pension benefits before September 15, 2012. This sounds very similar to what has happened to the Central States Buyout during the last contract.
  9. Sammy

    Sammy New Member

    For UPS, this structure allows the company to freeze its liability in the original pool

    If you have 30 years of service on September 15, 2012 you will retire under the original pool of pension assets. That pool is 46% funded and is in critical condition. How long before the original pool has no more assets to pay out since ( For UPS, this structure allows the company to freeze its liability in the original pool) UPS will no longer be legally liable for pension obligations under the old pool.
    If I started today at UPS I would be more certain of my future pension. This sounds good for new employees but not good for employees ready to retire.
    I may be wrong but that is how I read the press release.

  10. CaptainSlow

    CaptainSlow New Member

    Will the locals ask the union members what they think of this proposal, or will they make the decision without us?
  11. UpstateNYUPSer

    UpstateNYUPSer Very proud grandfather.

    It sounds as though the decision has already been made.
  12. Delivered

    Delivered Member

    All employees got to vote on the Central States deal if I remember correctly. Which made no sense to me. Why employees not in Central States got to vote on the proposal
  13. UpstateNYUPSer

    UpstateNYUPSer Very proud grandfather.

    While I do recall voting on the contract I don't recall voting on the CS deal.
  14. This so we can stay a billion dollar company and not worry about it and to ensure those affected can rely on their pensions.