UPS 2007 Annual Report Download - page 84

UNITED PARCEL SERVICE, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
The applicable benefit plan committees establish investment guidelines and strategies, and regularly monitor
the performance of the funds and portfolio managers. Our investment strategy with respect to pension assets is to
invest the assets in accordance with applicable laws and regulations. The long-term primary objectives for our
pension assets are to (1) provide for a reasonable amount of long-term growth of capital, without undue exposure
to risk; and protect the assets from erosion of purchasing power, and (2) provide investment results that meet or
exceed the plans’ actuarially assumed long-term rate of return.
Expected Cash Flows
Information about expected cash flows for the pension and postretirement benefit plans is as follows (in
millions):
U.S.
Pension Benefits
U.S. Postretirement
Medical Benefits
International Pension
Benefits
Employer Contributions:
2008 (expected) to plan trusts ..................... $ 101 $ — $ 32
2008 (expected) to plan participants ................ 17 67 7
Expected Benefit Payments:
2008 ..................................... $ 367 $ 158 $ 13
2009 ..................................... 435 173 15
2010 ..................................... 499 188 16
2011 ..................................... 569 203 17
2012 ..................................... 644 212 20
2013 - 2017 ............................... 4,549 1,294 129
Expected benefit payments for pensions will be primarily paid from plan trusts. Expected benefit payments
for postretirement medical 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
$7.642, $1.405, and $1.234 billion during 2007, 2006, and 2005, respectively. The 2007 amount includes the
$6.100 billion payment to withdraw from the Central States Pension Fund, as previously discussed.
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 $919, $862, and $798 million during 2007, 2006,
and 2005, 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 $128, $113, and $105 million for 2007, 2006, and
2005, respectively.
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