UPS to freeze 70k workers' pensions: 3 things to know

United Parcel Service will freeze 70,000 employees' pension plans and switch to a new benefit system due to increasing costs and unpredictable future payments, reports Bloomberg.

Here are three things to know.

  1. The freeze will take effect Jan. 1, 2023. Affected employees represent about 16 percent of the workforce and hold administrative or management roles.

  1. UPS will replace the current benefit plan with a contribution program that will put 5 to 8 percent of a worker's eligible salary into a 401k, based on seniority. Some employees will also receive a transition benefit, reports Bloomberg.

  1. Regulatory filings indicate the company's U.S. pension plans were 76 percent funded last year, falling short $9.85 billion.

"[The new benefit plan is] something that's been contemplated for quite some time, studied in some detail," UPS spokesman Steve Gaut told Bloomberg. "This just makes it more predictable for the company."

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