UPS 2013 Annual Report Download - page 95

UNITED PARCEL SERVICE, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
83
Certain plans have been aggregated in the “All Other Multiemployer Pension Plans” line in the following table, as the
contributions to each of these individual plans are not material.
EIN / Pension
Plan
Pension
Protection Act
Zone Status FIP/RP Status Pending/
(in millions)
UPS Contributions and
Accruals Surcharge
Pension Fund Number 2013 2012 Implemented 2013 2012 2011 Imposed
Alaska Teamster-Employer Pension Plan 92-6003463-024 Red Red Yes/Implemented $ 5 $ 4 $ 4 No
Automotive Industries Pension Plan 94-1133245-001 Red Red Yes/Implemented 4 4 4 No
Central Pennsylvania Teamsters Defined Benefit Plan 23-6262789-001 Green Yellow Yes/Implemented 30 29 27 No
Employer-Teamsters Local Nos. 175 & 505 Pension
Trust Fund 55-6021850-001 Green Green No 9 9 8 No
Hagerstown Motor Carriers and Teamsters Pension Fund 52-6045424-001 Red Red Yes/Implemented 5 5 5 No
I.A.M. National Pension Fund / National Pension Plan 51-6031295-002 Green Green No 27 24 25 No
International Brotherhood of Teamsters Union Local
No. 710 Pension Fund 36-2377656-001 Green Green No 88 75 74 No
Local 705, International Brotherhood of Teamsters
Pension Plan 36-6492502-001 Red Red Yes/Implemented 68 46 58 No
Local 804 I.B.T. & Local 447 I.A.M.—UPS
Multiemployer Retirement Plan 51-6117726-001 Red Red Yes/Implemented 88 87 84 No
Milwaukee Drivers Pension Trust Fund 39-6045229-001 Green Green No 29 26 26 No
New England Teamsters & Trucking Industry Pension
Fund 04-6372430-001 Red Red Yes/Implemented 102 124 124 No
New York State Teamsters Conference Pension and
Retirement Fund 16-6063585-074 Red Red Yes/Implemented 72 65 57 No
Teamster Pension Fund of Philadelphia and Vicinity 23-1511735-001 Yellow Yellow Yes/Implemented 46 44 41 No
Teamsters Joint Council No. 83 of Virginia Pension Fund 54-6097996-001 Yellow Yellow Yes/Implemented 49 44 41 No
Teamsters Local 639—Employers Pension Trust 53-0237142-001 Green Green No 41 36 33 No
Teamsters Negotiated Pension Plan 43-6196083-001 Yellow Red Yes/Implemented 26 24 22 No
Truck Drivers and Helpers Local Union No. 355
Retirement Pension Plan 52-6043608-001 Yellow Yellow Yes/Implemented 14 14 12 No
United Parcel Service, Inc.—Local 177, I.B.T.
Multiemployer Retirement Plan 13-1426500-419 Red Red Yes/Implemented 68 62 57 No
Western Conference of Teamsters Pension Plan 91-6145047-001 Green Green No 553 520 476 No
Western Pennsylvania Teamsters and Employers Pension
Fund 25-6029946-001 Red Red Yes/Implemented 23 24 21 No
All Other Multiemployer Pension Plans 49 59 44
Total Contributions $1,396 $1,325 $1,243
In 2012, we reached an agreement with the New England Teamsters and Trucking Industry Pension Fund ("NETTI Fund"), a
multiemployer pension plan in which UPS is a participant, to restructure the pension liabilities for approximately 10,200 UPS
employees represented by the Teamsters. The agreement reflected a decision by the NETTI Fund's trustees to restructure the NETTI
Fund through plan amendments to utilize a "two pool approach", which effectively subdivided the plan assets and liabilities between
two groups of beneficiaries. As part of this agreement, UPS agreed to withdraw from the original pool of the NETTI Fund, of which it
had historically been a participant, and reenter the NETTI Fund's newly-established pool as a new employer.
Upon ratification of the agreement by the Teamsters in September 2012, we withdrew from the original pool of the NETTI Fund
and incurred an undiscounted withdrawal liability of $2.162 billion to be paid in equal monthly installments over 50 years. The
undiscounted withdrawal liability was calculated by independent actuaries employed by the NETTI Fund, in accordance with the
governing plan documents and the applicable requirements of the Employee Retirement Income Security Act of 1974. In 2012, we
recorded a charge to expense to establish an $896 million withdrawal liability on our consolidated balance sheet, which represents the
present value of the $2.162 billion future payment obligation discounted at a 4.25% interest rate. This discount rate represents the
estimated credit-adjusted market rate of interest at which we could obtain financing of a similar maturity and seniority. As this
agreement is not a contribution to the plan, the amounts reflected in the previous table do not include this $896 million non-cash
transaction.
The $896 million charge to expense recorded in 2012 is included in "compensation and benefits" expense in the statements of
consolidated income, while the corresponding withdrawal liability is included in "other non-current liabilities" on the consolidated
balance sheet. We impute interest on the withdrawal liability using the 4.25% discount rate, while the monthly payments made to the
NETTI Fund reduce the remaining balance of the withdrawal liability.