UPS 2011 Annual Report Download - page 101

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UNITED PARCEL SERVICE, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
The discussion that follows sets forth the financial impact on our results of operations and cash flows for the
years ended December 31, 2011, 2010 and 2009 from our participation in multiemployer benefit plans. Several
factors could cause us to make significantly higher future contributions to these plans, including unfavorable
investment performance, changes in demographics and increased benefits to participants. However, all
surcharges are subject to the collective bargaining process. At this time, we are unable to determine the amount
of additional future contributions, if any, or whether any material adverse effect on our financial condition,
results of operations or liquidity would result from our participation in these plans.
The number of employees covered by our multiemployer plans has remained consistent over the past three
years, and there have been no significant changes that affect the comparability of 2011, 2010 and 2009
contributions. We recognize expense for the contractually-required contribution for each period, and we
recognize a liability for any contributions due and unpaid at the end of a reporting period.
Multiemployer Pension Plans
The following table outlines our participation in multiemployer pension plans for the periods ended
December 31, 2011, 2010 and 2009, and sets forth our calendar year contributions into each plan. The “EIN/
Pension Plan Number” column provides the Employer Identification Number (“EIN”) and the three-digit plan
number. The most recent Pension Protection Act zone status available in 2011 and 2010 relates to the plans’ two
most recent fiscal year-ends. The zone status is based on information that we received from the plans’
administrators and is certified by each plan’s actuary. Among other factors, plans certified in the red zone are
generally less than 65% funded, plans certified in the orange zone are both less than 80% funded and have an
accumulated funding deficiency or are expected to have a deficiency in any of the next six plan years, plans
certified in the yellow zone are less than 80% funded, and plans certified in the green zone are at least 80%
funded. The “FIP/RP Status Pending/Implemented” column indicates whether a financial improvement plan
(“FIP”) for yellow/orange zone plans, or a rehabilitation plan (“RP”) for red zone plans, is either pending or has
been implemented. As of December 31, 2011, all plans that have either a FIP or RP requirement have had the
respective FIP or RP implemented.
Our collectively-bargained contributions satisfy the requirements of all implemented FIPs and RPs and do
not currently require the payment of any surcharges. In addition, minimum contributions outside of the agreed
upon contractual rate are not required. For the plans detailed in the following table, the expiration date of the
associated collective bargaining agreements is July 31, 2013, with the exception of the Automotive Industries
Pension Plan and the IAM National Pension Fund / National Pension Plan which both have a July 31, 2014
expiration date. For all plans detailed in the following table, we provided more than 5 percent of the total plan
contributions from all employers for 2011, 2010 and 2009 (as disclosed in the Form 5500 for each respective
plan).
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