UPS Pension Plan

IBT/Teamster full-time employees: $185 per month for each year of future credited service, up to 35 years (effective January 1, 2024 under the current CBA; a 35-year employee earns $6,475/month at normal retirement). Part-time Teamster employees: $65 per year of credited service, up to 35 years (effective August 1, 2023). The companion UPS Retirement Plan (management, now frozen) used a Final Average Compensation formula: FAC (highest 5 consecutive years in the final 10) x Benefit Multiplier x Years of Benefit Service; it also offered a Portable Account (cash-balance) formula for participants hired on or after January 1, 2008.

This is general educational information about how the plan's formula works, not a calculation of your individual benefit. Your actual benefit depends on your service, pay history, and the plan terms in effect during your employment.

Is the UPS pension plan frozen?

Partially. The UPS Retirement Plan for non-union management employees was frozen to future benefit accruals effective January 1, 2023, affecting approximately 70,000 administrative and managerial employees who moved to an enhanced 401(k). The UPS Pension Plan covering IBT/Teamster full-time union employees has not been frozen and continues to accrue benefits under the current collective bargaining agreement, at $185 per month per year of service for full-time drivers.

How is a UPS Teamster pension benefit calculated?

Under the IBT contract effective January 1, 2024, full-time Teamster employees earn $185 per month for each year of credited future service, up to 35 years, producing up to $6,475 per month at age 65. Part-time employees earn $65 per year of credited service. Early retirement is available as young as age 50 with five years of vesting service, subject to a reduction for each year before normal retirement age 65.

Why did UPS leave the Central States Pension Fund in 2007?

The Central States Teamsters multiemployer fund was chronically underfunded, raising concerns about long-term benefit security. In 2007, UPS paid a $6.1 billion withdrawal liability to exit the fund and established its own company-sponsored UPS Pension Plan, giving UPS direct control over funding levels, investment strategy, and benefit design through collective bargaining with the IBT.

Is my UPS pension protected by the PBGC?

Most single-employer defined benefit pensions are insured by the Pension Benefit Guaranty Corporation (PBGC), a federal agency. If a covered plan terminates without enough money to pay promised benefits, the PBGC pays benefits up to a legal maximum that varies by age. Benefits that have been transferred to an insurance company through a pension risk transfer are no longer PBGC insured and are instead backed by state guaranty associations.

Should I take my UPS pension as a lump sum or an annuity?

There is no single right answer. The decision depends on your health and life expectancy, your other retirement assets, whether you need to provide for a survivor, and the interest rate environment that sets the lump sum value. Our lump sum versus annuity guide walks through the trade-offs in detail.