UPS to freeze pension plans for 70,000 non-union employees

The Atlanta-based parcel giant will suspend pension payments for about 70,000 non-union employees effective Jan. 1, 2023, and move those workers to a 401(k) plan.    United Parcel Service Inc. (UPS) will freeze pension plans for approximately 70,000 non-union employees in the United States, according to a report from multiple media outlets.
   The Atlanta-based parcel giant’s pension plans in the U.S. had a $9.85 billion shortfall at the end of 2016, meaning they were only about 76 percent funded.
   UPS’ pension freeze will not take effect until Jan. 1, 2023, and most of the affected employees are in administrative and management positions.
   Company spokesperson Steve Gaut said current retirees will not be affected by the move, Bloomberg reported.
   UPS said it will transfer those employees impacted by the pension freeze to 401(k) accounts and contribute funds to those retirement plans. The company will contribute between 5 and 8 percent of employees’ annual compensation to their 401(k) accounts, and match up to 3 percent of employee contributions, according to the Wall Street Journal.
   In 2016, UPS offered buyouts to all former UPS employees who were vested in the pension plan, with around 22,000 accepting the deal, accelerating $685 million in pension benefits that were due last year.