United Parcel Service Inc., Atlanta, expects to contribute $811 million to its $12.8 billion U.S. pension plans and $343 million international pension plans this year.
Gimme Credit, a fixed-income research firm, in a report issued today commented on the expected pension contribution, saying “one of UPS’ greatest strengths is its balance sheet,” noting the company holds $3.3 billion of cash and marketable securities. “We believe UPS maintains excellent liquidity, stable credit ratings and solid free cash flow,” said the report, written by B. Craig Hutson, analyst.
UPS in a May 7 filing had said it expects to contribute the $811 million over the remainder of the year. Of that, it is contributing $778 million to the new jointly trusteed UPS-International Brotherhood of Teamsters Plan created to cover employees who belong to the Teamsters Central States, Southeast and Southwest Areas Pension Plan, said Susan Rosenberg, UPS spokeswoman. The new plan was set up after UPS withdrew from the Central States plan.
UPS oversees the investment management of the joint plan, Ms. Rosenberg said. Further details were unavailable.
Last year UPS contributed $120 million to its pension plans. “The contributions to our company-sponsored pension plans are expected to increase significantly in 2009, compared with 2008, primarily as a result of required minimum pension funding for the UPS IBT Pension Plan,” the filing said.