UPS Fears $3.8 Billion Liability Over Bankrupt Central States Pension Plan | MishTalk
. . . all that is left is to allocate liability, and give haircuts.
More after the break.
We wrote about this story here:
Central States Pension Fund is essentially broke, and will need to cut payments to retirees . . .
UPS thinks it's retirees should get less of a haircut than the other retirees.
"In 2007, UPS dumped its pensioners into the Central States Pension Fund, a fund now destined for bankruptcy.
As part of the collective bargaining agreement, UPS agreed to pick up future payments if benefits are cut.
That provision may cost UPS $3.8 billion or more.
Let’s backtrack and fill in some details.
In December, the Central States Pension Fund informed the US Treasury department that the fund would run out of money in 10 years at the current rate of $3.46 in pension benefits for every $1 it receives from employers.
The plan proposed pension cuts of up to 60%."
Mish has the Central States "Dear Beneficiary" letter posted, go and read the whole thing.
UPS alleges that there are three groups in the pension, and that the UPS group should receive 53% of their current pension payments, the other groups should receive 29%, and 34%.
The Treasury Department did not approve anything, requiring larger cuts.