Quarterly report pursuant to Section 13 or 15(d)

EMPLOYEE BENEFIT PLANS

v2.4.0.8
EMPLOYEE BENEFIT PLANS
 3 Months Ended
Mar. 31, 2014
Compensation and Retirement Disclosure [Abstract]  
EMPLOYEE BENEFIT PLANS
EMPLOYEE BENEFIT PLANS
Company-Sponsored Benefit Plans
Information about net periodic benefit cost for our company-sponsored pension and postretirement benefit plans is as follows for the three months ended March 31, 2014 and 2013 (in millions):
 
U.S. Pension Benefits
 
U.S. Postretirement
Medical Benefits
 
International
Pension Benefits
2014
 
2013
 
2014
 
2013
 
2014
 
2013
Three Months Ended March 31:
 
 
 
 
 
 
 
 
 
 
 
Service cost
$
284

 
$
338

 
$
21

 
$
26

 
$
12

 
$
15

Interest cost
401

 
362

 
52

 
46

 
12

 
11

Expected return on assets
(564
)
 
(537
)
 
(6
)
 
(8
)
 
(15
)
 
(14
)
Amortization of:
 
 
 
 
 
 
 
 
 
 
 
Transition obligation
—

 
—

 
—

 
—

 
—

 
—

Prior service cost
42

 
43

 
1

 
1

 
—

 
—

Other net (gain) loss
—

 
—

 
—

 
—

 
—

 
—

Actuarial (gain) loss
—

 
—

 
—

 
—

 
—

 
—

Net periodic benefit cost
$
163

 
$
206

 
$
68

 
$
65

 
$
9

 
$
12


During the first three months of 2014, we contributed $25 and $31 million to our company-sponsored pension and postretirement medical benefit plans, respectively. We also expect to contribute $78 and $69 million over the remainder of the year to the pension and U.S. postretirement medical benefit plans, respectively.
Collective Bargaining Agreements
As of December 31, 2013, we had approximately 253,000 employees employed under a national master agreement and various supplemental agreements with local unions affiliated with the International Brotherhood of Teamsters (“Teamsters”). These agreements ran through July 31, 2013, but had been indefinitely extended pending the ratification of a new agreement with the Teamsters. On April 24, 2014, the Teamsters ratified a new national master agreement with UPS that will expire on July 31, 2018 (discussed further in note 16).
We have approximately 2,600 pilots who are employed under a collective bargaining agreement with the Independent Pilots Association, which became amendable at the end of 2011. In February 2014, UPS and the IPA requested mediation by the National Mediation Board for the ongoing contract negotiations.
Our airline mechanics are covered by a collective bargaining agreement with Teamsters Local 2727, which became amendable November 1, 2013. In addition, approximately 3,100 of our ground mechanics who are not employed under agreements with the Teamsters are employed under collective bargaining agreements with the International Association of Machinists and Aerospace Workers (“IAM”). Our agreement with the IAM runs through July 31, 2014.
Multiemployer Benefit Plans
We contribute to a number of multiemployer defined benefit and health and welfare plans under terms of collective bargaining agreements that cover our union-represented employees. Our current collective bargaining agreements set forth the annual contribution increases allotted to the plans that we participate in, and we are in compliance with these contribution rates. These limitations on annual contribution rates will remain in effect throughout the terms of the existing collective bargaining agreements.
As of March 31, 2014 and December 31, 2013 we had $882 and $884 million, respectively, recognized in "Other Non-Current Liabilities" on our consolidated balance sheets associated with our previous withdrawal from a multiemployer pension plan. This liability is payable in equal monthly installments over a remaining term of approximately 48 years. Based on the borrowing rates currently available to the Company for long-term financing of a similar maturity, the fair value of this withdrawal liability as of March 31, 2014 and December 31, 2013 was $782 and $783 million, respectively. We utilized Level 2 inputs in the fair value hierarchy of valuation techniques to determine the fair value of this liability.