Annual report pursuant to Section 13 and 15(d)

MULTIEMPLOYER EMPLOYEE BENEFIT PLANS

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MULTIEMPLOYER EMPLOYEE BENEFIT PLANS
 12 Months Ended
Dec. 31, 2023
Postemployment Benefits [Abstract]  
Multiemployer Employee Benefit Plans MULTIEMPLOYER EMPLOYEE BENEFIT PLANS
We contribute to a number of multiemployer pension plans under the terms of collective bargaining agreements that cover our union-represented employees. These plans generally provide for retirement, death and/or termination benefits for eligible employees within the applicable collective bargaining units, based on specific eligibility and participation requirements, vesting periods and benefit formulas. The risks of participating in multiemployer plans are different from single-employer plans in the following respects:
•Assets contributed to a multiemployer plan by one employer may be used to provide benefits to employees of other participating employers.
•If we negotiate to cease participating in a multiemployer pension plan, we may be required to pay that plan an amount based on our allocable share of its underfunded status, referred to as a "withdrawal liability". However, cessation of participation in a multiemployer plan and subsequent payment of any withdrawal liability is subject to the collective bargaining process.
•If any of the multiemployer pension plans in which we participate enter critical status, and our contributions are not sufficient to satisfy any rehabilitation plan funding schedule, we could be required under the Pension Protection Act of 2006 to make additional surcharge contributions to the multiemployer pension plan in the amount of five to ten percent of the existing contributions required by our labor agreement. Such surcharges would cease upon the ratification of a new collective bargaining agreement and could not reoccur unless a plan re-entered critical status at a later date.
The discussion that follows sets forth the impact on our results of operations and cash flows for the years ended December 31, 2023, 2022 and 2021 from our participation in multiemployer pension plans. As part of the overall collective bargaining process for wage and benefit levels, we have agreed to contribute certain amounts to these plans during the contract period. The plans set benefit levels and are responsible for benefit delivery to participants. Future contributions to the plans are determined only through collective bargaining, and we have no additional legal or constructive obligation to increase contributions beyond the agreed-upon amounts (except potential surcharges under the Pension Protection Act of 2006 described above).
The number of employees covered by multiemployer pension plans in 2023 decreased relative to 2022 as we reduced union headcount due to the reduction in volume. The number of covered employees in 2022 was relatively flat compared to 2021. Contribution rates increased in accordance with the terms of our collective bargaining agreements. There have been no other significant changes that affect the comparability of 2023, 2022 and 2021 contributions. We recognize expense for the contractually-required contributions for each period, and we recognize a liability for any contributions due and unpaid at the end of a reporting period.
Status of Collective Bargaining Agreements
We have approximately 310,000 employees in the U.S. employed under a national master agreement and various supplemental agreements with local unions affiliated with the Teamsters. These agreements were scheduled to expire on July 31, 2023. In September 2023, a new national master agreement with the Teamsters was ratified. This agreement contains wage and health and welfare benefit rate increases for our covered part-time and full-time Teamster employees.
We have approximately 10,000 employees in Canada employed under a collective bargaining agreement with the Teamsters which runs through July 31, 2025.
We have approximately 3,300 pilots who are employed under a collective bargaining agreement with the Independent Pilots Association. This collective bargaining agreement becomes amendable September 1, 2025.
We have approximately 1,900 airline mechanics who are covered by a collective bargaining agreement with Teamsters Local 2727 which becomes amendable November 1, 2026. In addition, approximately 3,000 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"). The collective bargaining agreement with the IAM runs through July 31, 2024.
Multiemployer Pension Plans
The following table outlines our participation in multiemployer pension plans as of December 31, 2023, 2022 and 2021, and sets forth our calendar year contributions and accruals for each plan.
The EIN/Pension Plan Number column provides the Employer Identification Number ("EIN") and the three-digit plan number. The most recent Pension Protection Act zone status available in 2023 and 2022 relates to each plan's two most recent fiscal year ends. The zone status is based on information that we received from the plans’ administrators and is certified by each plan’s actuary. Plans certified in the red zone are generally less than 65% funded; plans certified in the orange zone are both less than 80% funded and have an accumulated funding deficiency, or are expected to have a deficiency in any of the next six plan years; plans certified in the yellow zone are less than 80% funded; and plans certified in the green zone are at least 80% funded.
The FIP / RP Status Pending / Implemented column indicates whether a financial improvement plan ("FIP") for yellow/orange zone plans, or a rehabilitation plan ("RP") for red zone plans, is either pending or has been implemented. As of December 31, 2023, all plans that have either a FIP or RP requirement have had the respective plan implemented. Our collectively-bargained contributions satisfy the requirements of all implemented FIPs and RPs and do not currently require the payment of any surcharges. In addition, minimum contributions outside of the agreed-upon contractual rates are not required.
For the plans detailed in the following table, the expiration date of the associated collective bargaining agreements is July 31, 2028, with the exception of the IAM National Pension Fund / National Pension Plan, which has a July 31, 2024 associated expiration date. For all plans detailed in the following table, we provided more than 5% of the total plan contributions from all employers for 2023, 2022 and 2021, as disclosed in the annual filing with the Department of Labor for each respective plan.
Certain plans have been aggregated in the All Other Multiemployer Pension Plans line in the following table, as contributions to each of these plans are not individually material.
  EIN / Pension
Plan Number		 Pension
Protection Act
Zone Status		 FIP / RP Status
Pending / Implemented
UPS Contributions and Accruals
(in millions)
 Surcharge Imposed
Pension Fund 2023 2022 2023 2022 2021
Alaska Teamster-Employer Pension Plan 92-6003463-024 Red Red Yes Implemented 10  10  9  No
Central Pennsylvania Teamsters Defined Benefit Plan 23-6262789-001 Green Green No NA 82 75 65 No
Eastern Shore Teamsters Pension Fund 52-0904953-001 Green Green No NA 10  10  8  No
Employer-Teamsters Local Nos. 175 & 505 Pension Trust Fund 55-6021850-001 Red Red Yes Implemented 21 21 18 No
Hagerstown Motor Carriers and Teamsters Pension Fund 52-6045424-001 Green Red No NA 13 13 12 No
I.A.M. National Pension Fund / National Pension Plan 51-6031295-002 Red Red Yes Implemented 50  48  48  No
International Brotherhood of Teamsters Union Local No. 710 Pension Fund 36-2377656-001 Green Green No NA 196  191  180  No
Local 705, International Brotherhood of Teamsters Pension Plan 36-6492502-001 Green Green No NA 138  136  131  No
Local 804 I.B.T. & Local 447 I.A.M.—UPS Multiemployer Retirement Plan 51-6117726-001 Green Green No NA 143  144  135  No
Milwaukee Drivers Pension Trust Fund 39-6045229-001 Green Green No NA 62  62  58  No
New England Teamsters & Trucking Industry Pension Fund 04-6372430-001 Red Red Yes Implemented 234  167  145  No
New York State Teamsters Conference Pension and Retirement Fund 16-6063585-074 Red Red Yes Implemented 139  149  147  No
Teamster Pension Fund of Philadelphia and Vicinity 23-1511735-001 Green Green No NA 98  100  94  No
Teamsters Joint Council No. 83 of Virginia Pension Fund 54-6097996-001 Green Green No NA 98  98  89  No
Teamsters Local 639—Employers Pension Trust 53-0237142-001 Green Green No NA 84  85  80  No
Teamsters Negotiated Pension Plan 43-6196083-001 Green Green No NA 49  49  45  No
Truck Drivers and Helpers Local Union No. 355 Retirement Pension Plan 52-6043608-001 Green Green No NA 28  30  29  No
United Parcel Service, Inc.—Local 177, I.B.T. Multiemployer Retirement Plan 13-1426500-419 Green Green No NA 122  124  116  No
Western Conference of Teamsters Pension Plan 91-6145047-001 Green Green No NA 1,254  1,310  1,260  No
Western Pennsylvania Teamsters and Employers Pension Fund 25-6029946-001 Red Red Yes Implemented 46  46  40  No
All Other Multiemployer Pension Plans 76  73  78 
Total Contributions $ 2,953  $ 2,941  $ 2,787 
Agreement with the New England Teamsters and Trucking Industry Pension Fund
In 2012, we reached an agreement with the New England Teamsters and Trucking Industry Pension Fund ("NETTI Fund"), a multiemployer pension plan in which UPS is a participant, to restructure the pension liabilities for approximately 10,200 UPS employees represented by the Teamsters. As of December 31, 2023 and 2022, we had $813 and $821 million, respectively, recognized in Other Non-Current Liabilities and $9 and $8 million, respectively, recorded in Other current liabilities in our consolidated balance sheets, representing the remaining balance of the NETTI Fund withdrawal liability. This liability is payable in equal monthly installments over a remaining term of approximately 39 years. Based on the borrowing rates currently available to us for long-term financing of a similar maturity, the fair value of the NETTI Fund withdrawal liability as of December 31, 2023 and 2022 was $710 and $686 million, respectively. We utilized Level 2 inputs in the fair value hierarchy to determine the fair value of this liability.
Multiemployer Health and Welfare Plans
We also contribute to a number of multiemployer health and welfare plans covering both active and retired employees. Healthcare benefits are provided to participants who meet certain eligibility requirements as covered under the applicable collective bargaining unit. The following table sets forth our calendar year plan contributions and accruals. Certain plans have been aggregated in the All Other Multiemployer Health and Welfare Plans line, as the contributions to each of these plans are not individually material.
 
UPS Contributions and Accruals
(in millions)
Health and Welfare Fund 2023 2022 2021
Bay Area Delivery Drivers $ 40  $ 40  $ 41 
Central Pennsylvania Teamsters Health & Pension Fund 46  42  39 
Central States, South East & South West Areas Health and Welfare Fund 3,712  3,497  3,374 
Delta Health Systems—East Bay Drayage Drivers 39  39  39 
Joint Council #83 Health & Welfare Fund 63  62  56 
Local 401 Teamsters Health & Welfare Fund 23  22  19 
Local 804 Welfare Trust Fund 131  129  123 
Milwaukee Drivers Pension Trust Fund—Milwaukee Drivers Health and Welfare Trust Fund 64  62  59 
New York State Teamsters Health & Hospital Fund 87  89  91 
Northern California General Teamsters (DELTA) 206  211  209 
Northern New England Benefit Trust 83  87  81 
Oregon / Teamster Employers Trust 69  70  66 
Teamsters 170 Health & Welfare Fund 21  25  24 
Teamsters Benefit Trust 57  58  60 
Teamsters Local 175 & 505 Health and Welfare Fund 20  20  17 
Teamsters Local 191 Health Fund 29  17  17 
Teamsters Local 251 Health & Insurance Plan 22  26  26 
Teamsters Local 638 Health Fund 73  70  66 
Teamsters Local 639—Employers Health & Pension Trust Funds 36  38  40 
Teamsters Local 671 Health Services & Insurance Plan 24  25  24 
Teamsters Union 25 Health Services & Insurance Plan 73  75  74 
Teamsters Western Region & Local 177 Health Care Plan 1,076  1,035  980 
Truck Drivers and Helpers Local 355 Baltimore Area Health & Welfare Fund 23  23  23 
Utah-Idaho Teamsters Security Fund 54  54  52 
Washington Teamsters Welfare Trust 88  88  83 
All Other Multiemployer Health and Welfare Plans 109  129  130 
Total Contributions $ 6,268  $ 6,033  $ 5,813