Quarterly report pursuant to Section 13 or 15(d)

EMPLOYEE BENEFIT PLANS

v2.4.1.9
EMPLOYEE BENEFIT PLANS
 3 Months Ended
Mar. 31, 2015
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, 2015 and 2014 (in millions):
 
U.S. Pension Benefits
 
U.S. Postretirement
Medical Benefits
 
International
Pension Benefits
2015
 
2014
 
2015
 
2014
 
2015
 
2014
Three Months Ended March 31:
 
 
 
 
 
 
 
 
 
 
 
Service cost
$
382

 
$
284

 
$
9

 
$
21

 
$
12

 
$
12

Interest cost
423

 
401

 
31

 
52

 
11

 
12

Expected return on assets
(622
)
 
(564
)
 
(4
)
 
(6
)
 
(15
)
 
(15
)
Amortization of:
 
 
 
 
 
 
 
 
 
 
 
Transition obligation
—

 
—

 
—

 
—

 
—

 
—

Prior service cost
42

 
42

 
1

 
1

 
—

 
—

Other net (gain) loss
—

 
—

 
—

 
—

 
—

 
—

Actuarial (gain) loss
—

 
—

 
—

 
—

 
—

 
—

Settlement and curtailment loss
—

 
—

 
—

 
—

 
—

 
—

Net periodic benefit cost
$
225

 
$
163

 
$
37

 
$
68

 
$
8

 
$
9


During the first three months of 2015, we contributed $20 and $27 million to our company-sponsored pension and postretirement medical benefit plans, respectively. We also expect to contribute $1.100 billion and $77 million over the remainder of the year to the pension and U.S. postretirement medical benefit plans, respectively.
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, 2015 and December 31, 2014 we had $876 and $878 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, 2015 and December 31, 2014 was $930 and $913 million, respectively. We utilized Level 2 inputs in the fair value hierarchy of valuation techniques to determine the fair value of this liability.
Collective Bargaining Agreements
As of December 31, 2014, we had approximately 270,000 employees employed under a national master agreement and various supplemental agreements with local unions affiliated with the International Brotherhood of Teamsters (“Teamsters”), that will expire on July 31, 2018.
We have approximately 2,600 pilots who are employed under a collective bargaining agreement with the Independent Pilots Association ("IPA"), which became amendable at the end of 2011. The ongoing contract negotiations between UPS and the IPA are in mediation by the National Mediation Board.
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 auto and maintenance 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”) that will expire on July 31, 2019.