XML 39 R12.htm IDEA: XBRL DOCUMENT
v3.25.0.1

COMPANY-SPONSORED EMPLOYEE BENEFIT PLANS | 12 Months Ended
--- | ---
Dec. 31, 2024
Retirement Benefits [Abstract] |
COMPANY-SPONSORED EMPLOYEE BENEFIT PLANS | NOTE 5. COMPANY-SPONSORED EMPLOYEE BENEFIT PLANS We sponsor various retirement, postretirement and pension plans, including defined benefit and defined contribution plans, which cover our employees worldwide. U.S. Pension Benefits In the U.S. we maintain the following single-employer defined benefit pension plans: •The UPS Retirement Plan is noncontributory and includes substantially all eligible employees of participating domestic subsidiaries hired prior to July 1, 2016 who are not members of a collective bargaining unit, as well as certain employees covered by a collective bargaining agreement. This plan generally provides for retirement benefits based on average compensation earned by employees prior to retirement. Benefits payable under this plan are subject to maximum compensation limits and the annual benefit limits for a tax-qualified defined benefit plan as prescribed by the Internal Revenue Service (“IRS”). The plan ceased accruals of additional benefits for future service and compensation for non-union participants effective January 1, 2023. •The UPS Pension Plan is noncontributory and includes certain eligible employees of participating domestic subsidiaries and members of collective bargaining units that elect to participate in the plan. This plan generally provides for retirement benefits based on service credits earned by employees prior to retirement. •The UPS/IBT Full-Time Employee Pension Plan is noncontributory and includes employees that were previously members of the Central States Pension Fund ("CSPF"), a multiemployer pension plan, in addition to other eligible employees who are covered under certain collective bargaining agreements. This plan generally provides for retirement benefits based on service credits earned by employees prior to retirement. •The UPS Excess Coordinating Benefit Plan is a non-qualified plan that provides benefits to certain participants in the UPS Retirement Plan, hired prior to July 1, 2016, for amounts that exceed the benefit limits described above. The plan ceased accruals of additional benefits for future service and compensation for non-union participants effective January 1, 2023 Refer to note 6 for the status of our collective bargaining agreements. International Pension Benefits We also sponsor various defined benefit plans covering certain of our international employees. The majority of our international obligations are for defined benefit plans in Canada and the United Kingdom. In addition, many of our international employees are covered by government-sponsored retirement and pension plans. We are not directly responsible for providing benefits to participants of government-sponsored plans. During 2022, we amended certain Canadian defined benefit pension plans to cease future benefit accruals effective December 31, 2023. We remeasured plan assets and benefit obligations for the plans, which resulted in curtailment gains of $34 million ($24 million after tax). These gains were included in Investment income (expense) and other in our statement of consolidated income for the year ended December 31, 2022. U.S. Postretirement Medical Benefits We also sponsor postretirement medical plans in the U.S. that provide healthcare benefits to certain non-union retirees, as well as select union retirees who meet certain eligibility requirements and who are not otherwise covered by multiemployer plans. Generally, this includes employees with at least 10 years of service who have reached age 55 and employees who are eligible for postretirement medical benefits from a company-sponsored plan pursuant to collective bargaining agreements. We have the right to modify or terminate certain of these plans. These benefits have been provided to certain retirees on a noncontributory basis; however, in many cases, retirees are required to contribute all or a portion of the total cost of the coverage. Defined Contribution Plans We sponsor a defined contribution plan for employees not covered under collective bargaining agreements, and several smaller defined contribution plans for certain employees covered under collective bargaining agreements. We match, in cash, a portion of the participating employees’ contributions. Matching contributions charged to expense were $161, $161 and $153 million for 2024, 2023 and 2022, respectively. Beginning in 2023, non-union employees, including those previously accruing benefits in the UPS Retirement Plan, receive an annual retirement contribution of 5% to 8% (3% to 8% prior to 2023 for employees hired after July 1, 2016) of eligible compensation to the UPS 401(k) Savings Plan based on years of vesting service. Effective January 1, 2025, the UPS Retirement Plan contribution for certain non-union employees with an employment commencement date on or after January 1, 2025 is 3% of eligible compensation, regardless of years of vesting service. Retirement contributions charged to expense were $359, $380 and $83 million for 2024, 2023 and 2022, respectively. In addition, the UPS 401(k) Savings Plan provides for transition contributions to certain participants hired prior to 2008. The amounts charged to expense for transition contributions were $108 and $128 million for 2024 and 2023, respectively. There were no transition contributions in years prior to 2023. Contributions under this plan are subject to maximum compensation and contribution limits for a tax-qualified defined contribution plan as prescribed by the IRS. The UPS Restoration Savings Plan is a non-qualified plan that provides benefits to certain participants in the UPS 401(k) Savings Plan for amounts that exceed these benefit limits. Contributions are also made to defined contribution money purchase plans under certain collective bargaining agreements. Amounts charged to expense were $135, $132 and $119 million for 2024, 2023 and 2022, respectively. We also sponsor certain international defined contribution plans, which are not individually material. Net Periodic Benefit Cost Information about net periodic benefit cost for the company-sponsored pension and postretirement defined benefit plans is as follows (in millions):
| U.S. Pension Benefits |  | U.S. Postretirement Medical Benefits |  | International Pension Benefits
| 2024 |  | 2023 |  | 2022 |  | 2024 |  | 2023 |  | 2022 |  | 2024 |  | 2023 |  | 2022
Net Periodic Benefit Cost: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Service cost | $ | 1,240 |  |  | $ | 1,172 |  |  | $ | 2,024 |  |  | $ | 20 |  |  | $ | 20 |  |  | $ | 30 |  |  | $ | 42 |  |  | $ | 43 |  |  | $ | 68 |
Interest cost | 2,574 |  |  | 2,508 |  |  | 1,950 |  |  | 109 |  |  | 116 |  |  | 83 |  |  | 66 |  |  | 66 |  |  | 45 |
Expected return on plan assets | (3,085) |  |  | (2,967) |  |  | (3,280) |  |  | (4) |  |  | (12) |  |  | (4) |  |  | (83) |  |  | (84) |  |  | (78) |
Amortization of prior service cost | 152 |  |  | 106 |  |  | 93 |  |  | 1 |  |  | 2 |  |  | — |  |  | 1 |  |  | 1 |  |  | 1 |
Actuarial (gain) loss | 673 |  |  | 393 |  |  | (875) |  |  | — |  |  | — |  |  | — |  |  | (8) |  |  | (42) |  |  | (152) |
Curtailment and settlement (gain) loss | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | 8 |  |  | (34) |
Net periodic benefit cost | $ | 1,554 |  |  | $ | 1,212 |  |  | $ | (88) |  |  | $ | 126 |  |  | $ | 126 |  |  | $ | 109 |  |  | $ | 18 |  |  | $ | (8) |  |  | $ | (150) |
Actuarial Assumptions The table below provides the weighted-average actuarial assumptions used to determine the net periodic benefit cost:
| U.S. Pension Benefits |  | U.S. Postretirement Medical Benefits |  | International Pension Benefits
| 2024 |  | 2023 |  | 2022 |  | 2024 |  | 2023 |  | 2022 |  | 2024 |  | 2023 |  | 2022
Service cost discount rate | 5.42 | % |  | 5.79 | % |  | 3.13 | % |  | 5.80 | % |  | 6.06 | % |  | 3.28 | % |  | 4.59 | % |  | 5.09 | % |  | 2.78 | %
Interest cost discount rate | 5.42 | % |  | 5.79 | % |  | 3.13 | % |  | 5.80 | % |  | 6.06 | % |  | 3.28 | % |  | 4.56 | % |  | 5.02 | % |  | 2.74 | %
Rate of compensation increase | 3.25 | % |  | 3.25 | % |  | 4.29 | % |  | N/A |  | N/A |  | N/A |  | 3.19 | % |  | 3.20 | % |  | 3.17 | %
Expected return on plan assets | 7.17 | % |  | 7.07 | % |  | 5.90 | % |  | 6.36 | % |  | 6.62 | % |  | 4.77 | % |  | 4.54 | % |  | 5.13 | % |  | 3.87 | %
Cash balance interest credit rate | 3.83 | % |  | 4.21 | % |  | 2.50 | % |  | N/A |  | N/A |  | N/A |  | 3.31 | % |  | 3.69 | % |  | 2.94 | %
The table below provides the weighted-average actuarial assumptions used to determine the benefit obligations of our plans:
| U.S. Pension Benefits |  | U.S. Postretirement Medical Benefits |  | International Pension Benefits
| 2024 |  | 2023 |  | 2024 |  | 2023 |  | 2024 |  | 2023
Discount rate | 5.88 | % |  | 5.42 | % |  | 6.18 | % |  | 5.80 | % |  | 4.45 | % |  | 4.21 | %
Rate of compensation increase | 3.25 | % |  | 3.25 | % |  | N/A |  | N/A |  | 3.04 | % |  | 3.19 | %
Cash balance interest credit rate | 4.30 | % |  | 3.83 | % |  | N/A |  | N/A |  | 3.09 | % |  | 3.31 | %
A discount rate is used to determine the present value of our future benefit obligations. To determine the discount rate for our U.S. pension and postretirement benefit plans, we use a bond matching approach to select specific bonds that would satisfy our projected benefit payments. We believe the bond matching approach reflects the process we would employ to settle our pension and postretirement benefit obligations. For our international plans, the discount rate is determined by matching the expected cash flows of the plan, where available, or of a sample plan of similar duration, to a yield curve based on long-term, high quality fixed income debt instruments available as of the measurement date. These assumptions are updated each measurement date, which is typically annually. As of December 31, 2024, the impact of each basis point change in the discount rate on the projected benefit obligation of our pension and postretirement medical benefit plans was as follows (in millions):
| Increase (Decrease) in the Projected Benefit Obligation
| Pension Benefits |  | Postretirement Medical Benefits
One basis point increase in discount rate | $ | (57) |  |  | $ | (1) |
One basis point decrease in discount rate | $ | 60 |  |  | $ | 1 |
The Society of Actuaries ("SOA") published mortality tables and improvement scales are used in developing the best estimate of mortality for our U.S. plans. In October 2024, the SOA elected to not release a new mortality improvement scale. Based on our perspective of future longevity, we elected to maintain the MP 2021 mortality scale assumption for purposes of measuring pension and other postretirement benefit obligations. Assumptions for the expected return on plan assets are used to determine a component of net periodic benefit cost for the year. The assumption for our U.S. plans is developed using a long-term projection of returns for each asset class. Our asset allocation targets are reviewed annually and, if necessary, updated taking into consideration plan changes, funded status and actual performance. The expected return for each asset class is a function of passive, long-term capital market assumptions and excess returns generated from active management. The capital market assumptions used are provided by independent investment advisors, while excess return assumptions are supported by historical performance, fund mandates and investment expectations. As a result of our long-term U.S. capital market assumptions and investment objectives for pension assets, the weighted-average long-term expected rate of return on assets increased from 7.07% during 2023 to 7.17% in 2024. For plans outside the U.S., consideration is given to local market expectations of long-term returns. Strategic asset allocations are determined by plan, based on the nature of liabilities and considering the demographic composition of the plan participants. Actuarial Assumptions - Central States Pension Fund UPS was a contributing employer to the CSPF until 2007, at which time UPS withdrew from the CSPF. Under a collective bargaining agreement with the International Brotherhood of Teamsters (“IBT”), UPS agreed to provide coordinating benefits in the UPS/IBT Full-Time Employee Pension Plan (“UPS/IBT Plan”) for UPS participants whose last employer was UPS and who had not retired as of January 1, 2008 (“the UPS Transfer Group”) in the event that benefits are reduced by the CSPF consistent with the terms of our withdrawal agreement with the CSPF. Under this agreement, benefits to the UPS Transfer Group cannot be reduced without our consent and can only be reduced in accordance with law. In the event CSPF were to become insolvent, CSPF benefits would be reduced to the legally permitted Pension Benefit Guaranty Corporation ("PBGC") limits, triggering the coordinating benefits provision in the collective bargaining agreement. We account for the potential obligation to pay coordinating benefits under ASC Topic 715, which requires us to provide a best estimate of various actuarial assumptions in measuring our pension benefit obligation at the December 31 measurement date. As of December 31, 2024, our best estimate of coordinating benefits that may be required to be paid by the UPS/IBT Plan was immaterial. The value of our estimate for future coordinating benefits will continue to be influenced by a number of factors, including interpretations of the law, future legislative actions, actuarial assumptions and the ability of the CSPF to sustain its long-term commitments. Actual events may result in a change in our best estimate of the projected benefit obligation. We will continue to assess the impact of these uncertainties in accordance with ASC Topic 715. Other Actuarial Assumptions Healthcare cost trends are used to project future postretirement medical benefits payable from our plans. For purposes of measuring our U.S. plan obligations as of December 31, 2024, a 7.50% annual rate of increase in postretirement medical benefit costs was assumed; the rate was assumed to decrease gradually to 4.50% by 2037 and to remain at that level thereafter. Funded Status The following table discloses the funded status of our plans and the amounts recognized in our consolidated balance sheets as of December 31 (in millions):
| U.S. Pension Benefits |  | U.S. Postretirement Medical Benefits |  | International Pension Benefits
| 2024 |  | 2023 |  | 2024 |  | 2023 |  | 2024 |  | 2023
Funded Status: |  |  |  |  |  |  |  |  |  |  |
Fair value of plan assets | $ | 41,499 |  |  | $ | 43,491 |  |  | $ | 119 |  |  | $ | 98 |  |  | $ | 1,778 |  |  | $ | 1,893 |
Benefit obligation | (46,559) |  |  | (47,712) |  |  | (1,850) |  |  | (1,974) |  |  | (1,500) |  |  | (1,601) |
Funded status recognized at December 31 | $ | (5,060) |  |  | $ | (4,221) |  |  | $ | (1,731) |  |  | $ | (1,876) |  |  | $ | 278 |  |  | $ | 292 |
Funded Status Amounts Recognized in our Balance Sheet: |  |  |  |  |  |  |  |  |  |  |
Other non-current assets | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | 480 |  |  | $ | 510 |
Other current liabilities | (27) |  |  | (26) |  |  | (100) |  |  | (123) |  |  | (7) |  |  | (7) |
Pension and postretirement benefit obligations | (5,033) |  |  | (4,195) |  |  | (1,631) |  |  | (1,753) |  |  | (195) |  |  | (211) |
Net liability at December 31 | $ | (5,060) |  |  | $ | (4,221) |  |  | $ | (1,731) |  |  | $ | (1,876) |  |  | $ | 278 |  |  | $ | 292 |
Amounts Recognized in AOCI (1): |  |  |  |  |  |  |  |  |  |  |
Unrecognized net prior service cost | $ | (1,251) |  |  | $ | (1,326) |  |  | $ | (1) |  |  | $ | (2) |  |  | $ | (5) |  |  | $ | (7) |
Unrecognized net actuarial gain (loss) | (2,686) |  |  | (2,097) |  |  | 131 |  |  | 129 |  |  | 107 |  |  | 99 |
Gross unrecognized cost at December 31 | (3,937) |  |  | (3,423) |  |  | 130 |  |  | 127 |  |  | 102 |  |  | 92 |
Deferred tax asset at December 31 | 956 |  |  | 831 |  |  | (32) |  |  | (31) |  |  | (32) |  |  | (28) |
Net unrecognized cost at December 31 | $ | (2,981) |  |  | $ | (2,592) |  |  | $ | 98 |  |  | $ | 96 |  |  | $ | 70 |  |  | $ | 64 |
(1) Accumulated Other Comprehensive Income (Loss) The accumulated benefit obligation for our pension plans as of December 31, 2024 and 2023 was $48.0 and $49.2 billion, respectively. The accumulated benefit obligation for our postretirement medical benefit plans as of December 31, 2024 and 2023 was $1.9 and $2.0 billion, respectively. Benefit payments under the pension plans include $37 and $35 million paid from employer assets for the years ended December 31, 2024 and 2023, respectively. Benefit payments (net of participant contributions) under the postretirement medical benefit plans include $264 and $51 million paid from employer assets for the years ended December 31, 2024 and 2023, respectively. Such benefit payments from employer assets are also categorized as employer contributions. As of December 31, 2024 and 2023, the projected benefit obligation, the accumulated benefit obligation and the fair value of plan assets for pension plans with benefit obligations in excess of plan assets were as follows (in millions):
| Projected Benefit Obligation Exceeds the Fair Value of Plan Assets |  | Accumulated Benefit Obligation Exceeds the Fair Value of Plan Assets
| 2024 |  | 2023 |  | 2024 |  | 2023
U.S. Pension Benefits: |  |  |  |  |  |  |
Projected benefit obligation | $ | 46,559 |  |  | $ | 47,712 |  |  | $ | 46,559 |  |  | $ | 47,712 |
Accumulated benefit obligation | 46,526 |  |  | 47,674 |  |  | 46,526 |  |  | 47,674 |
Fair value of plan assets | 41,499 |  |  | 43,491 |  |  | 41,499 |  |  | 43,491 |
International Pension Benefits: |  |  |  |  |  |  |
Projected benefit obligation | $ | 337 |  |  | $ | 345 |  |  | $ | 281 |  |  | $ | 315 |
Accumulated benefit obligation | 301 |  |  | 304 |  |  | 255 |  |  | 281 |
Fair value of plan assets | 135 |  |  | 127 |  |  | 88 |  |  | 100 |
The accumulated postretirement benefit obligation presented in the funded status table exceeds plan assets for all U.S. postretirement medical benefit plans. Benefit Obligations and Fair Value of Plan Assets The following tables provide a reconciliation of the changes in the plans’ benefit obligations and fair value of plan assets as of the respective measurement dates in each year (in millions):
| U.S. Pension Benefits |  | U.S. Postretirement Medical Benefits |  | International Pension Benefits
| 2024 |  | 2023 |  | 2024 |  | 2023 |  | 2024 |  | 2023
Benefit Obligations: |  |  |  |  |  |  |  |  |  |  |
Projected benefit obligation at beginning of year | $ | 47,712 |  |  | $ | 43,504 |  |  | $ | 1,974 |  |  | $ | 2,016 |  |  | $ | 1,601 |  |  | $ | 1,416 |
Service cost | 1,240 |  |  | 1,172 |  |  | 20 |  |  | 20 |  |  | 42 |  |  | 43 |
Interest cost | 2,574 |  |  | 2,508 |  |  | 109 |  |  | 116 |  |  | 66 |  |  | 66 |
Gross benefits paid | (2,604) |  |  | (2,437) |  |  | (284) |  |  | (265) |  |  | (55) |  |  | (46) |
Plan participants’ contributions | — |  |  | — |  |  | 39 |  |  | 34 |  |  | 4 |  |  | 4 |
Plan amendments(1) | 76 |  |  | 699 |  |  | — |  |  | — |  |  | — |  |  | — |
Actuarial (gain)/loss | (2,438) |  |  | 2,266 |  |  | (7) |  |  | 53 |  |  | (58) |  |  | 99 |
Foreign currency exchange rate changes | — |  |  | — |  |  | — |  |  | — |  |  | (99) |  |  | 51 |
Curtailments and settlements | — |  |  | — |  |  | — |  |  | — |  |  | (4) |  |  | (38) |
Other | (1) |  |  | — |  |  | (1) |  |  | — |  |  | 3 |  |  | 6 |
Projected benefit obligation at end of year | $ | 46,559 |  |  | $ | 47,712 |  |  | $ | 1,850 |  |  | $ | 1,974 |  |  | $ | 1,500 |  |  | $ | 1,601 |
| U.S. Pension Benefits |  | U.S. Postretirement Medical Benefits |  | International Pension Benefits
| 2024 |  | 2023 |  | 2024 |  | 2023 |  | 2024 |  | 2023
Fair Value of Plan Assets: |  |  |  |  |  |  |  |  |  |  |
Fair value of plan assets at beginning of year | $ | 43,491 |  |  | $ | 42,058 |  |  | $ | 98 |  |  | $ | 215 |  |  | $ | 1,893 |  |  | $ | 1,643 |
Actual return on plan assets | (615) |  |  | 2,664 |  |  | (2) |  |  | (8) |  |  | 41 |  |  | 201 |
Employer contributions | 1,228 |  |  | 1,206 |  |  | 269 |  |  | 122 |  |  | 27 |  |  | 65 |
Plan participants’ contributions | — |  |  | — |  |  | 39 |  |  | 34 |  |  | 4 |  |  | 4 |
Gross benefits paid | (2,604) |  |  | (2,437) |  |  | (284) |  |  | (265) |  |  | (55) |  |  | (46) |
Foreign currency exchange rate changes | — |  |  | — |  |  | — |  |  | — |  |  | (118) |  |  | 64 |
Curtailments and settlements | — |  |  | — |  |  | — |  |  | — |  |  | (4) |  |  | (38) |
Other | (1) |  |  | — |  |  | (1) |  |  | — |  |  | (10) |  |  | — |
Fair value of plan assets at end of year | $ | 41,499 |  |  | $ | 43,491 |  |  | $ | 119 |  |  | $ | 98 |  |  | $ | 1,778 |  |  | $ | 1,893 |
(1) Plan amendments in 2024 and 2023 were related to collective bargaining agreements with the Teamsters. 2024 - $2.5 billion pre-tax actuarial gain related to benefit obligations: •Discount Rates ($2.8 billion pre-tax gain): The weighted-average discount rate for our pension and postretirement medical plans increased from 5.40% as of December 31, 2023 to 5.85% as of December 31, 2024, primarily due to an increase in treasury yields on AA-rated corporate bonds. •Demographic and Assumption Changes ($0.3 billion pre-tax loss): This represents the difference between actual and estimated participant data and demographic factors, including healthcare cost trends, compensation changes, rates of termination, retirement, mortality and other changes. 2023 - $2.4 billion pre-tax actuarial loss related to benefit obligations: •Discount Rates ($2.3 billion pre-tax loss): The weighted-average discount rate for our pension and postretirement medical plans decreased from 5.77% as of December 31, 2022 to 5.40% as of December 31, 2023, primarily due to a decrease in credit spreads on AA-rated corporate bonds. •Demographic and Assumption Changes ($0.1 billion pre-tax loss): This represents the difference between actual and estimated participant data and demographic factors, including healthcare cost trends, compensation changes, rates of termination, retirement, mortality and other changes. Pension and Postretirement Plan Assets Pension assets are invested in accordance with applicable laws and regulations, as well as investment guidelines established by plan trustees. The strategic asset mixes are specifically tailored for each plan given distinct factors, including liability and liquidity needs. Equities, alternative investments, and other higher-yielding assets are utilized to generate returns and promote growth. Derivatives, repurchase/reverse repurchase agreements and fixed income securities are utilized as tools for duration management, mitigating interest rate risk, and minimizing funded status volatility. The primary long-term investment objectives for pension assets are to provide for a reasonable amount of long-term capital growth to meet future obligations while minimizing risk exposures and reducing funded status volatility. To meet these objectives, investment managers are engaged to actively manage assets within the guidelines and strategies set forth by our investment committee. Active managers are monitored regularly and their performance is compared to applicable benchmarks. Fair Value Measurements Plan assets valued utilizing Level 1 inputs include equity investments, corporate debt instruments, U.S. government securities, derivatives and other instruments. Fair values were determined by closing prices for those securities traded on national stock exchanges, while securities traded in the over-the-counter market and listed securities for which no sale was reported on the valuation date are valued at the mean between the last reported bid and ask prices. Level 2 assets include fixed income securities that are valued based on yields currently available on comparable securities of other issues with similar credit ratings; mortgage-backed securities that are valued based on cash flow and yield models using acceptable modeling and pricing conventions; hedge funds, equity securities and certain investments that are pooled with other investments in a commingled fund; and derivatives and other instruments primarily valued using pricing models that rely on market observable inputs such as yield curves, foreign currency exchange rates and investment forward price. We value our investments in commingled funds by taking the percentage ownership of the underlying assets, each of which has a readily determinable fair value. Fair value estimates for certain investments are based on unobservable inputs that are not corroborated by observable market data and are thus classified as Level 3. Investments that do not have a readily determinable fair value, and which provide a NAV or its equivalent developed consistent with ASC measurement principles, are valued using NAV as a practical expedient. These investments are not classified in Levels 1, 2, or 3 of the fair value hierarchy but instead included within the subtotals by asset category. Such investments include hedge funds, real estate investments, private debt and private equity funds. Investments in hedge funds are valued using the reported NAV as of December 31. Real estate investments, private debt and private equity funds are valued at NAV per the most recent partnership audited financial reports, and adjusted, as appropriate, for investment activity between the date of the financial reports and December 31. Due to the inherent limitations in obtaining a readily determinable fair value measurement for alternative investments, the fair values reported may differ from the values that would have been used had readily available market information for the alternative investments existed. These investments are described further below: •Hedge Funds: Plan assets are invested in hedge funds that pursue multiple strategies to diversify risk and reduce volatility. Most of these hedge funds allow redemptions either quarterly or semi-annually after a two- to three-month notice period, while others allow for redemption after only a brief notification period with no restriction on redemption frequency. No unfunded commitments existed with respect to hedge funds as of December 31, 2024. •Real Estate, Private Debt and Private Equity Funds: Plan assets are invested in limited partnership interests in various private equity, private debt and real estate funds. Limited provisions exist for the redemption of these interests by the limited partners that invest in these funds until the end of the term of the partnerships, typically ranging between 10 and 15 years from the date of inception. An active secondary market exists for similar partnership interests, although no particular value (discount or premium) can be guaranteed. As of December 31, 2024, unfunded commitments to such limited partnerships totaling approximately $2.7 billion are expected to be contributed over the remaining investment period, typically ranging between three and six years. The fair values of U.S. and international pension and postretirement benefit plan assets by asset category as of December 31, 2024 and 2023 are presented below (in millions), as well as the percentage that each category comprises of our total plan assets and the respective target allocations. The asset categories within equity securities, fixed income securities, and alternative and other investments in the table below have been collapsed from prior year presentation to align with the nature, characteristics, and type of underlying risk of those assets. There were no transfers between asset categories.
December 31, 2024 | Total Assets(1) |  | Level 1 |  | Level 2 |  | Level 3 |  | Percentage of Plan Assets |  | Percentage Target Allocation |  |  |  |
Asset Category (U.S. Plans): |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Cash and cash equivalents(3) | $ | 5,716 |  |  | $ | 5,450 |  |  | $ | 266 |  |  | $ | — |  |  | 13.7 | % |  | 1-7% |  |  |  |
Equity securities | 6,979 |  |  | 3,270 |  |  | 3,709 |  |  | — |  |  | 16.8 | % |  | 15-45% |  |  |  |
Fixed income securities | 19,643 |  |  | 13,375 |  |  | 6,247 |  |  | 21 |  |  | 47.2 | % |  | 30-73% |  |  |  |
Alternative and other investments(1): |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Hedge funds | 2,034 |  |  | — |  |  | 538 |  |  | — |  |  | 4.9 | % |  | 3-13% |  |  |  |
Real estate | 2,674 |  |  | 301 |  |  | 77 |  |  | — |  |  | 6.4 | % |  | 3-15% |  |  |  |
Private equity, private debt, and other investments | 6,508 |  |  | — |  |  | 195 |  |  | — |  |  | 15.6 | % |  | 5-29% |  |  |  |
Total Alternative and other investments | 11,216 |  |  | 301 |  |  | 810 |  |  | — |  |  |  |  |  |  |  |  |
Derivatives and other instruments, net: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Equity risk | (392) |  |  | (99) |  |  | (294) |  |  | — |  |  | (0.9) | % |  |  |  |  |  |
Interest rate risk | (1,619) |  |  | (442) |  |  | (1,177) |  |  | — |  |  | (3.9) | % |  |  |  |  |  |
Other risk(2) | 75 |  |  | 2 |  |  | 73 |  |  | — |  |  | 0.2 | % |  |  |  |  |  |
Total Derivatives and other instruments | (1,936) |  |  | (539) |  |  | (1,398) |  |  | — |  |  |  |  |  |  |  |  |
Total U.S. plan assets | $ | 41,618 |  |  | $ | 21,857 |  |  | $ | 9,634 |  |  | $ | 21 |  |  | 100.0 | % |  |  |  |  |  |
Asset Category (International Plans): |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Cash and cash equivalents | $ | 127 |  |  | $ | 127 |  |  | $ | — |  |  | $ | — |  |  | 7.1 | % |  | 1-10% |  |  |  |
Equity securities | 165 |  |  | 23 |  |  | 142 |  |  | — |  |  | 9.3 | % |  | 1-10% |  |  |  |
Fixed income securities | 1,202 |  |  | 243 |  |  | 959 |  |  | — |  |  | 67.6 | % |  | 50-75% |  |  |  |
Alternative and other investments(1): |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Real estate | 62 |  |  | — |  |  | 17 |  |  | 23 |  |  | 3.5 | % |  | 1-10% |  |  |  |
Private equity, private debt, and other investments | 222 |  |  | — |  |  | 189 |  |  | 18 |  |  | 12.5 | % |  | 10-35% |  |  |  |
Total International plan assets | $ | 1,778 |  |  | $ | 393 |  |  | $ | 1,307 |  |  | $ | 41 |  |  | 100.0 | % |  |  |  |  |  |
Total plan assets | $ | 43,396 |  |  | $ | 22,250 |  |  | $ | 10,941 |  |  | $ | 62 |  |  |  |  |  |  |  |  |
(1) Includes certain investments that are measured at NAV per share (or its equivalent). (2) Includes credit risk, foreign currency exchange risk and commodity risk. (3) Includes $2.7 billion of cash held as collateral for market exposures, which is not subject to the target allocations.
December 31, 2023 | Total Assets(1) |  | Level 1 |  | Level 2 |  | Level 3 |  | Percentage of Plan Assets |  | Percentage Target Allocation
Asset Category (U.S. Plans): |  |  |  |  |  |  |  |  |  |  |
Cash and cash equivalents | $ | 1,018 |  |  | $ | 894 |  |  | $ | 124 |  |  | $ | — |  |  | 2.3 | % |  | 1-7%
Equity securities | 10,164 |  |  | 3,448 |  |  | 6,716 |  |  | — |  |  | 23.3 | % |  | 15-45%
Fixed income securities | 25,673 |  |  | 17,299 |  |  | 8,374 |  |  | — |  |  | 58.9 | % |  | 30-70%
Alternative and other investments(1): |  |  |  |  |  |  |  |  |  |  |
Hedge funds | 3,959 |  |  | 28 |  |  | 2,194 |  |  | — |  |  | 9.1 | % |  | 3-13%
Real estate | 2,575 |  |  | 393 |  |  | 77 |  |  | — |  |  | 5.9 | % |  | 3-15%
Private equity, private debt, and other investments | 6,188 |  |  | — |  |  | 169 |  |  | — |  |  | 14.2 | % |  | 5-35%
Total Alternative and other investments | 12,722 |  |  | 421 |  |  | 2,440 |  |  | — |  |  |  |  |
Derivative and other instruments, net: |  |  |  |  |  |  |  |  |  |  |
Equity risk contracts | (136) |  |  | 29 |  |  | (165) |  |  | — |  |  | (0.3) | % |  |
Interest rate risk contracts | (5,877) |  |  | (20) |  |  | (5,857) |  |  | — |  |  | (13.5) | % |  |
Other risk(2) | 25 |  |  | (1) |  |  | 26 |  |  | — |  |  | 0.1 | % |  |
Total Derivative and other instruments | (5,988) |  |  | 8 |  |  | (5,996) |  |  | — |  |  |  |  |
Total U.S. plan assets | $ | 43,589 |  |  | $ | 22,070 |  |  | $ | 11,658 |  |  | $ | — |  |  | 100.0 | % |  |
Asset Category (International Plans): |  |  |  |  |  |  |  |  |  |  |
Cash and cash equivalents | $ | 71 |  |  | $ | 77 |  |  | $ | (6) |  |  | $ | — |  |  | 3.8 | % |  | 1-10%
Equity securities | 109 |  |  | 20 |  |  | 89 |  |  | — |  |  | 5.8 | % |  | 1-10%
Fixed income securities | 1,392 |  |  | 312 |  |  | 1,080 |  |  | — |  |  | 73.5 | % |  | 50-75%
Alternative and other investments(1): |  |  |  |  |  |  |  |  |  |  |
Real estate | 66 |  |  | — |  |  | 18 |  |  | 25 |  |  | 3.5 | % |  | 1-10%
Private equity, private debt, and other investments | 255 |  |  | — |  |  | 183 |  |  | 55 |  |  | 13.4 | % |  | 10-35%
Total International plan assets | $ | 1,893 |  |  | $ | 409 |  |  | $ | 1,364 |  |  | $ | 80 |  |  | 100.0 | % |  |
Total plan assets | $ | 45,482 |  |  | $ | 22,479 |  |  | $ | 13,022 |  |  | $ | 80 |  |  |  |  |
(1) Includes certain investments that are measured at NAV per share (or its equivalent). (2) Includes credit risk, foreign currency exchange risk and commodity risk. The following table presents the changes in the Level 3 instruments measured on a recurring basis for the years ended December 31, 2024 and 2023 (in millions):
| Fixed Income Securities |  | Alternative and Other Investments |  | Total
Balance as of January 1, 2023 | $ | — |  |  | $ | 77 |  |  | $ | 77 |
Actual Return on Assets: |  |  |  |  |
Assets Held at End of Year | — |  |  | 4 |  |  | 4 |
Assets Sold During the Year | 2 |  |  | — |  |  | 2 |
Purchases | 450 |  |  | 2 |  |  | 452 |
Sales | (452) |  |  | (3) |  |  | (455) |
Transfers Into (Out of) Level 3 | — |  |  | — |  |  | — |
Balance as of December 31, 2023 | $ | — |  |  | $ | 80 |  |  | $ | 80 |
Actual Return on Assets: |  |  |  |  |
Assets Held at End of Year | (1) |  |  | 1 |  |  | — |
Assets Sold During the Year | 4 |  |  | (12) |  |  | (8) |
Purchases | 38 |  |  | — |  |  | 38 |
Sales | (10) |  |  | (28) |  |  | (38) |
Transfers Into (Out of) Level 3 | (10) |  |  | — |  |  | (10) |
Balance as of December 31, 2024 | $ | 21 |  |  | $ | 41 |  |  | $ | 62 |
There were no shares of UPS class A or class B common stock directly held in plan assets as of December 31, 2024 or 2023. Expected Cash Flows Information about expected cash flows for our pension and postretirement medical benefit plans is as follows (in millions):
| U.S. Pension Benefits |  | U.S. Postretirement Medical Benefits |  | International Pension Benefits
Expected Employer Contributions: |  |  |  |  |
2025 to plan trust | $ | 1,170 |  |  | $ | 140 |  |  | $ | 10 |
2025 to plan participants | 28 |  |  | 93 |  |  | 7 |
Expected Benefit Payments: |  |  |  |  |
2025 | $ | 2,395 |  |  | $ | 209 |  |  | $ | 55 |
2026 | 2,529 |  |  | 199 |  |  | 61 |
2027 | 2,665 |  |  | 190 |  |  | 67 |
2028 | 2,800 |  |  | 179 |  |  | 74 |
2029 | 2,926 |  |  | 169 |  |  | 79 |
2030 - 2034 | 16,292 |  |  | 731 |  |  | 469 |
Our funding policy guideline for U.S. plans is to contribute amounts annually that are at least equal to the amounts required by applicable laws and regulations. International plans will be funded in accordance with local regulations. Additional discretionary contributions may be made when deemed appropriate to meet the long-term obligations of the plans. Expected benefit payments for pensions will be paid primarily from plan trusts. Expected benefit payments for postretirement medical benefits will be paid from plan trusts and corporate assets.

X
- References No definition available. + Details
Name: | us-gaap_CompensationAndRetirementDisclosureAbstract
Namespace Prefix: | us-gaap_
Data Type: | xbrli:stringItemType
Balance Type: | na
Period Type: | duration

X
- Definition The entire disclosure for retirement benefits. + References Reference 1: http://www.xbrl.org/2003/role/disclosureRef -Topic 715 -SubTopic 70 -Name Accounting Standards Codification -Section 50 -Paragraph 1 -Publisher FASB -URI https://asc.fasb.org/1943274/2147480794/715-70-50-1 Reference 2: http://www.xbrl.org/2003/role/exampleRef -Topic 715 -SubTopic 20 -Name Accounting Standards Codification -Section 55 -Paragraph 17 -Publisher FASB -URI https://asc.fasb.org/1943274/2147480482/715-20-55-17 Reference 3: http://www.xbrl.org/2003/role/disclosureRef -Topic 715 -SubTopic 20 -Name Accounting Standards Codification -Section 50 -Paragraph 1 -Subparagraph (d)(iv)(03) -Publisher FASB -URI https://asc.fasb.org/1943274/2147480506/715-20-50-1 Reference 4: http://www.xbrl.org/2003/role/disclosureRef -Topic 715 -SubTopic 20 -Name Accounting Standards Codification -Section 50 -Paragraph 1 -Subparagraph (d)(i) -Publisher FASB -URI https://asc.fasb.org/1943274/2147480506/715-20-50-1 Reference 5: http://www.xbrl.org/2003/role/disclosureRef -Topic 715 -SubTopic 20 -Name Accounting Standards Codification -Section 50 -Paragraph 1 -Subparagraph (q) -Publisher FASB -URI https://asc.fasb.org/1943274/2147480506/715-20-50-1 Reference 6: http://www.xbrl.org/2003/role/disclosureRef -Topic 715 -SubTopic 20 -Name Accounting Standards Codification -Section 50 -Paragraph 1 -Subparagraph (l) -Publisher FASB -URI https://asc.fasb.org/1943274/2147480506/715-20-50-1 Reference 7: http://www.xbrl.org/2003/role/disclosureRef -Topic 715 -Name Accounting Standards Codification -Publisher FASB -URI https://asc.fasb.org/715/tableOfContent Reference 8: http://www.xbrl.org/2003/role/disclosureRef -Topic 715 -SubTopic 20 -Name Accounting Standards Codification -Section 50 -Paragraph 1 -Subparagraph (d)(iii) -Publisher FASB -URI https://asc.fasb.org/1943274/2147480506/715-20-50-1 Reference 9: http://www.xbrl.org/2003/role/disclosureRef -Topic 715 -SubTopic 20 -Name Accounting Standards Codification -Section 50 -Paragraph 1 -Subparagraph (o) -Publisher FASB -URI https://asc.fasb.org/1943274/2147480506/715-20-50-1 Reference 10: http://www.xbrl.org/2003/role/disclosureRef -Topic 715 -SubTopic 20 -Name Accounting Standards Codification -Section 50 -Paragraph 1 -Subparagraph (p) -Publisher FASB -URI https://asc.fasb.org/1943274/2147480506/715-20-50-1 Reference 11: http://www.xbrl.org/2003/role/disclosureRef -Topic 715 -SubTopic 20 -Name Accounting Standards Codification -Section 50 -Paragraph 1 -Subparagraph (r)(1) -Publisher FASB -URI https://asc.fasb.org/1943274/2147480506/715-20-50-1 Reference 12: http://www.xbrl.org/2003/role/disclosureRef -Topic 715 -SubTopic 20 -Name Accounting Standards Codification -Section 50 -Paragraph 1 -Subparagraph (r)(2) -Publisher FASB -URI https://asc.fasb.org/1943274/2147480506/715-20-50-1 Reference 13: http://www.xbrl.org/2003/role/disclosureRef -Topic 715 -SubTopic 20 -Name Accounting Standards Codification -Section S99 -Paragraph 2 -Publisher FASB -URI https://asc.fasb.org/1943274/2147480126/715-20-S99-2 Reference 14: http://www.xbrl.org/2003/role/disclosureRef -Topic 715 -SubTopic 60 -Name Accounting Standards Codification -Section 50 -Paragraph 3 -Subparagraph (c) -Publisher FASB -URI https://asc.fasb.org/1943274/2147480266/715-60-50-3 + Details
Name: | us-gaap_PensionAndOtherPostretirementBenefitsDisclosureTextBlock
Namespace Prefix: | us-gaap_
Data Type: | dtr-types:textBlockItemType
Balance Type: | na
Period Type: | duration