YRC Sets Pension Fund Agreement with Teamsters
YRC Worldwide said Thursday it has finalized an agreement with the Teamsters union in which YRC will provide real estate assets as collateral in lieu of contributions to the union’s pension fund in the second quarter.
The move affects the Central States, Southeast and Southwest areas pension funds, YRC said in a statement.
The estimated combined contribution deferral to Central States is $83 million, and the agreement calls for YRC to repay the deferred contributions over three years beginning in January 2010.
Central States is the largest of YRC’s multi-employer Teamsters pension funds, representing 58% of its monthly pension funding obligations, the company said.
YRC Worldwide is also finalizing discussions with its other Teamster multi-employer pension funds to join as participants in this same agreement. Currently, the company has deferred about $50 million related to these other funds, Bloomberg reported.
“These transactions are especially critical as we continue to face substantial headwinds from the global economic recession,” said Bill Zollars, YRC’s Chairman and Chief Executive Officer.
“Today's announcement marks important milestones, which are part of our overall strategy to provide us with greater financial flexibility during the economic recession, giving us additional liquidity and the ability to use our cash to support the business,” he said in a statement.
YRC is ranked No. 4 on the Transport Topics 100 listing of U.S. and Canadian for-hire carriers.
