April 24 (Bloomberg) — United Parcel Service Inc. will record a pretax cost of about $1.05 billion this quarter for changes to health-care benefits for union workers under a five-year contract approved by the International Brotherhood of Teamsters.
Under the agreement, Atlanta-based UPS also will make a pretax cash payment of $2.27 billion to multi-employer funds assuming administration of active and post-retirement health- care benefits for Teamster-represented mployees, the company said in a filing today.
UPS is moving its health-care plans from a defined-benefit plan to a defined-contribution plan, with contributions set for the term of the contract. As a result of the change, it will also remove $1.2 billion in post-retirement health obligations from its balance sheet. Future retirees will be the responsibility of the multiemployer plan.
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