United Parcel Service (NYSE:UPS) said it will restructure pension liabilities for about 10,200 employees and take a related one-time charge of $896 million in the third quarter ending September.
Continue Reading Below
In a deal with the New England Teamsters and Trucking Industry Pension Fund, the company will move its employees to a new pension plan pool that was established to make it more attractive for new employers to join the fund.
The $896 million charge represents the present value of the company's $2.1 billion withdrawal liability from the original pool, which it will pay over the next 50 years, UPS said.
The withdrawal, which is subject to approval by local unions, will be effective Sept. 16.
UPS and the pension fund agreed to a contribution rate that will ensure that UPS employees do not see a reduction in their pension benefits. The company said it will not be required to increase cash contributions for 10 years.
UPS shares closed at $75.72 on the New York Stock Exchange on Friday.