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UPS Changes Pension-Plan Accounting

January 31, 2012

United Parcel Service Inc. (UPS) has become the latest big U.S. company to change its pension accounting to a methodology considered more transparent but that can add volatility to corporate profits from year to year.

The shipping giant UPS said it will record an $827 million pretax charge for the fourth quarter as it changes to a mark-to-market system of accounting, in which it recognizes significant gains and losses in its pension plans on an annual basis instead of spreading the effect over time. It said the move has no impact on benefits paid to plan participants or its pension funding.

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