UPS 2011 Annual Report Download - page 92

UNITED PARCEL SERVICE, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
U.S. Postretirement Medical Benefits
We also sponsor postretirement medical plans in the U.S. that provide health care benefits to our retirees
who meet certain eligibility requirements and who are not otherwise covered by multiemployer plans. Generally,
this includes employees with at least 10 years of service who have reached age 55 and employees who are
eligible for postretirement medical benefits from a Company-sponsored plan pursuant to collective bargaining
agreements. We have the right to modify or terminate certain of these plans. These benefits have been provided
to certain retirees on a noncontributory basis; however, in many cases, retirees are required to contribute all or a
portion of the total cost of the coverage.
International Pension Benefits
We also sponsor various defined benefit plans covering certain of our international employees. The majority
of our international obligations are for defined benefit plans in Canada and the United Kingdom. In addition,
many of our international employees are covered by government-sponsored retirement and pension plans. We are
not directly responsible for providing benefits to participants of government-sponsored plans.
Defined Contribution Plans
We also sponsor several defined contribution plans for all employees not covered under collective
bargaining agreements, and for certain employees covered under collective bargaining agreements. The
Company matches, in shares of UPS common stock or cash, a portion of the participating employees’
contributions. In early 2009, we suspended the company matching contributions to the primary employee defined
contribution plan. A revised program of company matching contributions was reinstated effective January 1,
2011. Matching contributions charged to expense were $80, $4 and $21 million for 2011, 2010 and 2009,
respectively.
Contributions are also made to defined contribution money purchase plans under certain collective
bargaining agreements. Amounts charged to expense were $76, $78 and $80 million for 2011, 2010, and 2009,
respectively.
Net Periodic Benefit Cost
Information about net periodic benefit cost for the company-sponsored pension and postretirement benefit
plans is as follows (in millions):
U.S. Pension Benefits
U.S. Postretirement
Medical Benefits
International
Pension Benefits
2011 2010 2009 2011 2010 2009 2011 2010 2009
Net Periodic Cost:
Service cost .................... $ 870 $ 723 $ 689 $ 89 $ 86 $ 85 $ 34 $ 24 $ 17
Interest cost .................... 1,309 1,199 1,130 207 214 211 39 34 28
Expected return on assets .......... (1,835) (1,381) (1,151) (16) (22) (27) (43) (36) (26)
Amortization of:
Transition obligation ......... — — 4 ——————
Prior service cost ............ 171 172 178746111
Actuarial (gain) loss .............. 736 70 ———— 914216
Other .......................... — — 3 ———— 6 1
Net periodic benefit cost .......... $1,251 $ 783 $ 853 $287 $282 $275 $122 $ 71 $ 37
80