UPS 2005 Annual Report Download - page 79

UNITED PARCEL SERVICE, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
At September 30, 2005 and 2004, the projected benefit obligation, the accumulated benefit obligation, and
the fair value of plan assets for pension plans with a projected benefit obligation in excess of plan assets and for
pension plans with an accumulated benefit obligation in excess of plan assets were as follows (in millions):
Projected Benefit Obligation
Exceeds the Fair Value of
Plan Assets
Accumulated Benefit Obligation
Exceeds the Fair Value of
Plan Assets
2005 2004 2005 2004
As of September 30
Projected benefit obligation ..................... $705 $438 $705 $433
Accumulated benefit obligation .................. 578 354 578 350
Fair value of plan assets ........................ 266 132 266 129
The accumulated postretirement benefit obligation exceeds plan assets for all of our other postretirement
benefit plans.
Expected Cash Flows
Information about expected cash flows for the pension and postretirement benefit plans is as follows (in millions):
Pension Benefits
Postretirement
Medical Benefits
Employer Contributions:
2006 (expected) to plan trusts .............................. $ 763 $ 65
2006 (expected) to plan participants ......................... 30 65
Expected Benefit Payments:
2006 .............................................. $ 322 $ 132
2007 .............................................. 338 140
2008 .............................................. 376 149
2009 .............................................. 410 160
2010 .............................................. 454 170
2011 - 2015 ........................................ 3,136 1,000
Expected benefit payments for pensions will be primarily paid from plan trusts. Expected benefit payments
for postretirement benefits will be paid from plan trusts and corporate assets. Our funding policy for U.S. plans is
to contribute amounts annually that are at least equal to the amounts required by applicable laws and regulations,
or to directly fund payments to plan participants, as applicable. International plans will be funded in accordance
with local regulations. Additional discretionary contributions will be made when deemed appropriate to meet the
long-term obligations of the plans.
Other Plans
We also contribute to several multi-employer pension plans for which the previous disclosure information is
not determinable. Amounts charged to operations for pension contributions to these multi-employer plans were
$1.289, $1.163, and $1.066 billion during 2005, 2004, and 2003, respectively.
We also contribute to several multi-employer health and welfare plans that cover both active and retired
employees for which the previous disclosure information is not determinable. Amounts charged to operations for
contributions to multi-employer health and welfare plans were $798, $761, and $691 million during 2005, 2004,
and 2003, respectively.
We also sponsor a defined contribution plan for all employees not covered under collective bargaining agreements.
The Company matches, in shares of UPS common stock, a portion of the participating employees’ contributions.
Matching contributions charged to expense were $105, $94, and $87 million for 2005, 2004, and 2003, respectively.
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