UPS announced it has reached an agreement with the New England Teamsters and Trucking Industry Pension Fund to restructure pension plans for about 10,200 employees.
UPS expects a charge of $896 million in the third quarter to establish a second pension-plan pool. The one-time charge represents the current value of the $2.1 billion withdrawal liability from the original pool, which UPS will pay over the next 50 years. The new structure is intended to make it more attractive for employees to join the fund, according to the Wall Street Journal.
“This transfer will remove uncertainty associated with this plan for our people while being fair to the company and our investors,” according to John McDevitt, UPS’s senior vice president of human resources and labor relations.
UPS cited weakened customer confidence as the cause of weaker-than-expected profit growth of 2.2% for the second quarter. The company has reduced its profit forecast for the full year.