YRC Worldwide Inc. is providing the following update regarding the participation of several of its subsidiaries in the Central States Southeast and Southwest Areas Pension Plan (the Central States Plan).
United Parcel Service, Inc. (UPS) issued a press release on October 1, 2007 stating that UPS has reached a new tentative labor agreement with the International Brotherhood of Teamsters for unionized employees engaged in UPS' package business. UPS stated that in its new labor agreement with the Teamsters, UPS has agreed to withdraw from the Central States Plan and make a cash payment of $6.1 billion to the plan. UPS is a major participant in this multi-employer pension plan in addition to certain YRC Worldwide subsidiaries and over 3,000 other employers. This new labor agreement would be effective upon the affected UPS Teamster employees ratifying the agreement.
YRC Worldwide believes that the funded percentage of the Central States Plan is currently approximately 50%. If the new UPS labor agreement is ratified and UPS makes its contractually agreed withdrawal payment to the Central States Plan, YRC Worldwide believes that the funded percentage of the Central States Plan would be approximately 70%.
"Due to the likely improvement in the funded status of the Central States Plan, coupled with prudent actions that plan trustees have previously taken and the implementation of the Pension Protection Act of 2006, our overall risk associated with contingent pension obligations is reduced," stated Bill Zollars, Chairman, President and CEO of YRC Worldwide.