Questions and Answers for UPS Employees in Central States Pension Fund

Q1: Why did UPS and the International Brotherhood of Teamsters (IBT) agree to withdraw UPS employees from the Central States, Southeast and Southwest Areas Pension Fund (CSPF) and set up a plan for UPS employees only?

Q2: Who is eligible to participate in the new UPS/IBT Plan?

Q3: Does the UPS/IBT Plan cover part-time employees?

Q4: When did the UPS/IBT Plan become effective?

Q5: In general, what does the UPS/IBT Plan offer?

Q6: Does the UPS/IBT Plan offer survivor or death benefits?

Q7: Does the UPS/IBT Plan offer disability benefits?

Q8: What happens if I work for UPS for 20 years but only have three years in the UPS/IBT Plan? In this case, will I be entitled to a benefit from the UPS/IBT Plan?

Q9: What will I receive if I was in the CSPF for only three years and then worked 27 years under the UPS/IBT Plan?

Q10: I understand that my Service Pension will be $3,000 if I have 30 years of service and it will be $3,500 if I have 35 years of service. What will my Service Pension be if I have 34 years?

Q11: Is there a cap on service in the UPS/IBT Plan?

Q12: What's the difference in the terms, Service Pension, Partial Service Pension, Normal Retirement and monthly benefit crediting rate?

Q13: Can I retire earlier than age 65 under the UPS/IBT Plan?

Q14: Will my benefit be reduced when I become eligible for Social Security?

Q15: How is the new UPS/IBT Plan be managed?

Q16: If I worked for five years as a UPS part-timer covered by the UPS Pension Plan and another 25 years as a UPS driver, how would the pension be paid from the UPS/IBT Plan?

Q17: If I participated in the UPS Pension Plan as a part-time employee, then went into the CSPF as a full-time employee and now participate in the UPS/IBT Plan, would I get separate checks when I retire?

Q18: Why would I receive more than one pension check?

Q19: What is the eligibility age to begin accruing credit under the UPS/IBT Plan?

Q20: In the UPS/IBT Plan, what are the re-employment restrictions if I decide to work somewhere else after retirement?

Q21: The CSPF has an optional form of benefit payment called the Joint and Survivor benefit. Is that option available in the UPS/IBT Plan?

Q22: Can I get a different form of benefit payment from the UPS/IBT Plan than the CSPF?

Q23: How many hours do I need to get one full year of credit in the new Plan?

Q24: If the CSPF reduced the benefit I am receiving, would UPS make up the difference in my retirement benefit?

Q25: How can I get more information?



Q1: Why did UPS and the International Brotherhood of Teamsters (IBT) agree to withdraw UPS employees from the Central States, Southeast and Southwest Areas Pension Fund (CSPF) and set up a plan for UPS employees only?
A: After reviewing many options, UPS and the IBT concluded that setting up a new Plan for full-time Teamster-represented UPS employees who are participating in the CSPF was the best option for UPSers.

The new UPS/IBT Full-Time Employee Pension Plan (later referred to as the "UPS/IBT Plan" or the "Plan") immediately restored retirement benefits to levels that were available to participants before the CSPF modified benefits in 2003. A main feature of the UPS/IBT Plan is that it restored the Service Pension which allows an employee to retire with defined years of service at a guaranteed benefit level, such as the 20-, 25- and 30-Year Service Pensions (also known as the 20-and-out, 25-and-out and 30-and-out pensions). This means that employees may begin to receive unreduced benefits at an earlier age. Additionally, the UPS/IBT Plan offers opportunities to retire with greater benefits in the future under a Normal Retirement situation.

Doing nothing was not an option. So UPS put forth a proposal, agreed to by the IBT, that benefits UPS people previously covered by the CSPF and still allows UPS to remain competitive. Even though many employers are no longer offering pensions, this Plan greatly improves pensions for UPS people.
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Q2: Who is eligible to participate in the new UPS/IBT Plan?
A: Current, full-time UPSers, who are covered by a collective bargaining agreement(CBA) between UPS and the IBT that provides for participation under this Plan and who participate, or would become eligible to participate, in the CSPF as of December 26, 2007, will immediately participate in the new Plan on January 1, 2008.
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Q3: Does the UPS/IBT Plan cover part-time employees?
A: No. Part-time employees are eligible for a separate plan, the UPS Pension Plan. However, part-time employees who take full-time job opportunities in Covered Employment may become participants in the new Plan.
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Q4: When did the UPS/IBT Plan become effective?
A: The UPS/IBT Plan became effective on January 1, 2008.
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Q5: In general, what does the UPS/IBT Plan offer?
A: The Plan immediately restored retirement benefits to levels that were available to participants before the CSPF modified benefits in 2003, such as $2,500 for a 25-Year Service Pension (if you are at least age 57 when you retire), $3,000 for a 30-Year Service Pension and $3,500 for a 35-Year Service Pension. The maximum Service Pension is $3,500 per month. Service for the Normal Retirement Pension benefit is not capped. The monthly benefit crediting rate for a Normal Retirement Pension benefit will increase in steps from $132 in 2008 to $170 in 2013, an overall increase of 29%.

The Plan recognizes the UPS time that people have earned in the CSPF. It also recognizes UPS Pension Plan service (the plan covering most part-time Teamster-represented employees) for Partial Service Pension eligibility.

Compared to the CSPF, in effect prior to 12/31/2007, the new Plan allows participants to retire early with a Service Pension or a Partial Service Pension, or retire with a greater Normal Retirement Pension benefit in future years. Because the UPS/IBT Plan will have higher legal funding requirements, it will be financially secure.
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Q6: Does the UPS/IBT Plan offer survivor or death benefits?
A: Yes. The Plan provides death benefits if you die after becoming vested but before you retire from UPS. If you die after your benefit payments start, your spouse may continue to receive payments depending on the form of payment that you elect.
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Q7: Does the UPS/IBT Plan offer disability benefits?
A: Yes. Disability benefits, similar to those under the CSPF, are available from the UPS/IBT Plan benefits.
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Q8: What happens if I work for UPS for 20 years but only have three years in the UPS/IBT Plan? In this case, will I be entitled to a benefit from the UPS/IBT Plan?
A: All past service with the CSPF or as a UPSer will count toward vesting in the UPS/IBT Plan. You will be entitled to a benefit from the new Plan.
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Q9: What will I receive if I was in the CSPF for only three years and then worked 27 years under the UPS/IBT Plan?
A: Since you have a total of 30 years of service, you will be eligible for a 30-Year Service Pension of $3,000 per month for your lifetime from the UPS/IBT Plan. The CSPF will not pay any portion of your retirement benefit because you were not vested in your CSPF benefit as of December 26, 2007.
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Q10: I understand that my Service Pension will be $3,000 if I have 30 years of service and it will be $3,500 if I have 35 years of service. What will my Service Pension be if I have 34 years?
A: If you have 34 years of full-time service in the CSPF and the UPS/IBT Plan, you are eligible to receive a monthly Service Pension of $3,400.
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Q11: Is there a cap on service in the UPS/IBT Plan?
A: There is no cap on the amount of service you can accrue for a Normal Retirement Pension benefit. However, the maximum Service Pension amount is $3,500 per month.
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Q12: What's the difference in the terms, Service Pension, Partial Service Pension, Normal Retirement and monthly benefit crediting rate?
A: In simple terms, a Service Pension is calculated based on the total years of service recognized by the UPS/IBT Plan and the CSPF. This allows someone with as few as 20 years of service at age 50 or later, or someone with 25 years of service at any age, to receive a Service Pension benefit.

A Partial Service Pension is calculated based on the combined years of service recognized by the UPS/IBT Plan, the CSPF and the UPS Pension Plan (the plan covering most part-time Teamster-represented employees). This allows someone with as few as 25 years of combined service to receive a pro-rata Service Pension from this Plan.

Normal Retirement refers to someone who works until the full retirement age recognized by the UPS/IBT Plan, typically age 65. The Normal Retirement Pension is calculated using the monthly benefit crediting rate. The monthly benefit crediting rate increases 29% from 2008 through 2013, meaning higher benefit amounts are possible.
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Q13: Can I retire earlier than age 65 under the UPS/IBT Plan?
A: Yes. You may retire as early as age 50 and receive your Early Retirement Pension benefit (including the amount earned while you participated in the CSPF) from the UPS/IBT Plan. Your pension benefit, payable from the UPS/IBT Plan, will be offset by your benefit payable from the CSPF when you reach your Normal Retirement Date (typically, age 65).
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Q14: Will my benefit be reduced when I become eligible for Social Security?
A: No. There is no offset or reduction for any Social Security retirement income you may receive.
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Q15: How is the new UPS/IBT Plan be managed?
A: The UPS/IBT Plan is a jointly trusteed plan that has equal representation from both UPS and the IBT. The trustees are responsible for management of the UPS/IBT Plan.
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Q16: If I worked for five years as a UPS part-timer covered by the UPS Pension Plan and another 25 years as a UPS driver, how would the pension be paid from the UPS/IBT Plan?
A: Since you have combined service of 30 years, you will qualify for a 30-Year Partial Service Pension from both the UPS Pension Plan and the UPS/IBT Plan. The UPS Pension Plan will pay you 5/30 of its 30-Year Service Pension that was applicable at the time you left that plan, and the new Plan will pay you 25/30 of its Service Pension.
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Q17: If I participated in the UPS Pension Plan as a part-time employee, then went into the CSPF as a full-time employee and now participate in the UPS/IBT Plan, would I get separate checks when I retire?
A: If you are entitled to a benefit from any of the plans, each respective plan will pay you separately -- either by check or direct deposit. The CSPF benefit will begin at your Normal Retirement Date (typically, age 65).
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Q18: Why would I receive more than one pension check?
A: The UPS/IBT Plan pays your entire benefit prior to your Normal Retirement Date. At your Normal Retirement Date, you will receive your benefit from a combination of the UPS/IBT Plan and the CSPF.
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Q19: What is the eligibility age to begin accruing credit under the UPS/IBT Plan?
A: There is no eligibility age for the new Plan. You become a participant after completing one year of service (which is the same as the CSPF). Upon becoming a participant, Service Credit will accrue beginning with the very first hour of service that has been performed when the participant began working in Covered Employment. However, if you participated in the CSPF as a UPS employee on December 26, 2007, you then began participating in the new Plan on January 1, 2008.
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Q20: In the UPS/IBT Plan, what are the re-employment restrictions if I decide to work somewhere else after retirement?
A: The UPS/IBT Plan has no such restriction and will only exclude you from receiving a benefit payment if you return to work for UPS or one of its Related Companies.
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Q21: The CSPF has an optional form of benefit payment called the Joint and Survivor benefit. Is that option available in the UPS/IBT Plan?
A: Yes. The UPS/IBT Plan provides the same Joint and Survivor payment option as the CSPF.
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Q22: Can I get a different form of benefit payment from the UPS/IBT Plan than the CSPF?
A: No. The form of benefit payment you select from the UPS/IBT Plan will be the same form of benefit you will receive from the CSPF.
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Q23: How many hours do I need to get one full year of credit in the new Plan?
A: You will need to work 1,801 Hours of Service in Covered Employment to receive one full year of credit under the UPS/IBT Plan. If you work less than 1,801 hours in a calendar year, you will receive pro-rata Service Credit. Hours of Service include each hour for which you are paid, or entitled to be paid, for the performance of your job duties with UPS. It also includes hours for which you are paid, or entitled to be paid, for vacations and holidays, illness, jury duty, military duty, authorized leaves of absence or workers' compensation absence (up to one year). Service Credit is used in calculating your pension benefit at your Normal Retirement Date.

Under the new UPS/IBT Plan, if you work 40 hours in a week in Covered Employment, you will earn a full year of Service Credit in 45 weeks, instead of 52 weeks required under the CSPF.

For purposes of Service Pensions only, participants earn one year of Service Credit if they work 40 weeks in a calendar year (which is the same as the CSPF).
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Q24: If the CSPF reduced the benefit I am receiving, would UPS make up the difference in my retirement benefit?
A: Yes.
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Q25: How can I get more information?
A: You can refer to the Summary Plan Description which is available on this web site or you can call, write or email the Plan's Administrative offices at:
UPS/IBT Full-Time Employee Pension Plan
55 Glenlake Parkway, NE
Atlanta, GA 30328
Phone: (800) 643-4442
Email: RetirementDept@UPS.com



The benefits described in these questions and answers are pending ratification. These benefits are only for eligible, full-time employees of United Parcel Service, Inc. (an Ohio corporation and a New York corporation later referred to as UPS) who are covered by the collective bargaining agreement between UPS and the International Brotherhood of Teamsters (IBT) that provides for participation under this Plan. These questions and answers are intended to describe the UPS/IBT Full-Time Employee Pension Plan.

The official Plan document for the UPS/IBT Full-Time Employee Pension Plan will control in the event of any differences between the Plan documents and the benefits described in these questions and answers. Although UPS and the IBT intend to maintain the Plan indefinitely, UPS and the IBT trustees reserve the right to amend or discontinue any employee benefits or plans at any time for any reason.
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