UPS Fears $3.8 Billion Liability Over Bankrupt Central States Pension Plan

In 2007, UPS dumped its pensioners into the Central States Pension Fund, a fund now destined for bankruptcy.

As part of the collective bargaining agreement, UPS agreed to pick up future payments if benefits are cut.

That provision may cost UPS $3.8 billion or more.

Let’s backtrack and fill in some details.

In December, the Central States Pension Fund informed the US Treasury department that the fund would run out of money in 10 years at the current rate of $3.46 in pension benefits for every $1 it receives from employers.

The plan proposed pension cuts of up to 60%.

Also in December, UPS Called For Denial of the Rescue Plan.

UPS got it wish.

I reported on May 20, Rejected: Central States Fund Proposes 60% Pension Cuts, Treasury Dept Says “Not Enough”; 407,000 Affected.

The fund sent out this letter on May 20.

Dear Beneficiary

Central States Pension2

Click here for the entire “Dear Beneficiary” letter.

There is no plan now, except to let the fund make billions more in payments than it takes in, a sure guarantee the plan will have no assets 10 years from now (assuming 7% or so returns annually).

Dateline April 28: UPS Fears $3.8 Billion Liability

Please consider UPS Faces Up to $3.8 Billion Charge if Central States Benefit Reductions Approved.