Separate Pension Expense, Contributions and Funded Status With Claude and FMP MCP

By Pranjal Saxena·Nov 12, 2026·28 min read

Data in Action

Three pension numbers often get treated as one. Pension expense is an accounting charge built from service cost, interest cost, expected returns, amortization and any actuarial gain or loss. Employer contributions are the cash the company actually puts into its plans or pays to retirees. Funded status is the gap between plan assets and the benefit obligation at a measurement date. A year can show falling expense, falling contributions and a still-wide deficit all at once, and reading any one of them as a proxy for the others leads to the wrong conclusion. It is a pension-specific case of the gap explained in why cash flow tells a different story than earnings.

This walkthrough separates the three for United Parcel Service (UPS) for 2025 and 2024. Claude takes company context from FMP's standardized annual statements, then works from the Note 5 tables and cash-flow statement lines of UPS's 2025 10-K, pasted into the prompt as excerpts, to build a worksheet for each plan group.

The output is a two-period worksheet showing plan coverage, the obligation definition, plan assets, calculated and disclosed funded status, expense, actual contributions, sources and review notes, plus a table that sets the 2025 changes in expense and contributions side by side. Every pension figure carries the letter of the excerpt it came from. The worksheet covers UPS's three company-sponsored plan groups in Note 5. It does not cover UPS's other retirement arrangements, and it does not forecast pension solvency, model cash needs or add the deficit to debt.

Key takeaways

In the standardized balance-sheet and cash-flow responses tested, no field refers to pensions. The pension figures come from the filing note, and the worksheet makes no claim about other FMP endpoints.
UPS reports three plan groups with different obligation definitions: a projected benefit obligation for the two pension groups and an accumulated postretirement benefit obligation for retiree medical. They are kept apart.
Calculated funded status equals the disclosed figure for every group in both years, and ties to the balance-sheet lines in the note.
In 2025, expense across the three groups was $1,009 million and actual employer contributions were $1,361 million. Both fell from 2024 ($1,698 million and $1,524 million), but by different amounts, so neither can stand in for the other.
The 2024 U.S. pension expense includes a $673 million actuarial loss that does not appear in 2025, which accounts for almost all of that group's $686 million drop in expense.
The 2026 contribution amounts in the note are expectations. They appear in a separate table and are never mixed with actual contributions.

Building the pension worksheet

UPS suits this exercise because its defined benefit plans are material, with a U.S. pension obligation of $48.5 billion at the end of 2025, and its note presents three plan groups side by side with a full reconciliation for each. Pension contributions are one of several cash commitments competing for operating cash flow, alongside the dividend obligations covered in detecting dividend sustainability risks through cash flow and balance sheet analysis; this worksheet measures only the pension side.

Scope

The worksheet covers the three company-sponsored plan groups described in Note 5: U.S. pension benefits, U.S. postretirement medical benefits and international pension benefits. UPS's other retirement arrangements are outside it. That includes the defined contribution plans described in the same note, the multiemployer plans covered in a separate note, and the government-sponsored plans that cover some international employees.

Plan groups and obligation definitions

Plan group	Coverage per Note 5	Obligation measure used in funded status
U.S. pension benefits	U.S. single-employer defined benefit pension plans, including the UPS Retirement Plan	Projected benefit obligation (PBO)
U.S. postretirement medical benefits	U.S. retiree health care plans	Accumulated postretirement benefit obligation (APBO)
International pension benefits	Defined benefit plans covering certain international employees	Projected benefit obligation (PBO)

The PBO includes expected future salary increases for pay-related plans; the APBO is the retiree-medical equivalent and has no salary component. The note's reconciliation table labels all three rows "projected benefit obligation," but its text states that the postretirement figure in the funded status table is the APBO, so the worksheet records the postretirement obligation as an APBO.

Measures

Measure	Calculation or source	Where it is used	Purpose
Calculated funded status	Fair value of plan assets − benefit obligation, same group and year-end	Tables 3 and 5	Measures the funding position from its two parts
Disclosed funded status	"Funded status recognized as of December 31" in Note 5	Tables 3 and 5	Checks the calculation against the company's figure
Balance-sheet presentation	Other non-current assets + other current liabilities + pension and postretirement benefit obligations, signed as in Note 5	Table 3	Shows where the funded status sits in the balance sheet
Accounting expense	"Net periodic benefit cost" in Note 5	Tables 4 to 6	The charge recognized in the income statement
Actual contributions	"Employer contributions" in the plan-asset reconciliation in Note 5	Tables 4 to 6	Cash the company paid into plans or paid to participants from its own assets
Expected contributions	2026 expected employer contributions in Note 5	Table 4	A forecast, shown separately
Change 2025 vs 2024	2025 minus 2024; a negative result is a decline	Table 6	Compares how expense and contributions moved

Aggregation rule

Funded status, plan assets and benefit obligations are reported for each group and never combined, because the obligations are measured differently and the note presents no combined benefit obligation or funded status. Review labels apply to one group in one year. The one place the groups are added is expense and actual contributions, solely to compare their totals with the two cash-flow statement lines, which are company-wide. Expected contributions are never added to actual contributions.

Citation rule

Every figure carries the letter of the excerpt it came from, and each excerpt maps to a named source table: a Note 5 table or the consolidated statements of cash flows. A calculated figure shows the letters of its inputs. A figure that appears in no excerpt is Unavailable.

Sign convention

Funded status is assets minus obligation, so a deficit is negative and a surplus positive. Note 5 shows liabilities in parentheses, and the worksheet keeps that sign. In the cash-flow statement, pension expense is a positive add-back and contributions are a negative outflow. FMP's standardized balance sheet reports liabilities as positive amounts, so its figures appear as positives in Table 1 and are never netted against note figures.

Review rules

These are screening labels set for this worksheet.

Label	Rule
Reconciled	Calculated and disclosed funded status are equal, and the balance-sheet lines sum to the same figure
Explained difference	The two differ by an amount the excerpts identify
Review required	A difference remains unexplained, or a figure lacks an excerpt citation

A figure the excerpts do not provide is recorded as Unavailable. Expected contributions are never used in place of an actual figure.

FMP data inputs and access through with Claude FMP MCP

Company context comes from FMP's Balance Sheet Statement API and Cash Flow Statement API, both in the financial statements dataset. The pension evidence comes from UPS's 2025 10-K as returned by the Financial Reports Form 10-K JSON API. FMP's notes on how statements are parsed describe how filings become standardized fields.

Claude connector tool / operation	Parameters	What it provides	Feeds
statements / balance-sheet-statement	symbol=UPS, period=annual, limit=2	Total liabilities, other non-current liabilities, equity, accumulated other comprehensive income	Table 1
statements / cashflow-statement	symbol=UPS, period=annual, limit=2	Net cash from operating activities	Table 1
statements / financial-reports-form-10-k-json	symbol=UPS, year=2025, period=FY	Note 5 tables and text, and cash-flow statement lines, copied into Prompt 2 as excerpts A to F	Tables 2 to 6

The third operation is not called inside the run. Its response was read separately on November 9, 2026, and the excerpts were copied from it into Prompt 2 with their headings, columns, units and years. The response holds the filing as structured sections: Note 5 appears as a text block plus detail tables whose names begin COMPANY-SPONSORED EMPLOYEE BENEFIT PLANS, and the cash-flow statement appears as STATEMENTS OF CONSOLIDATED CASH FLOWS. These sections carry filing amounts, not standardized pension fields. A reader can reproduce the excerpts by calling the same operation and copying the same tables from UPS's fiscal 2025 Form 10-K, filed February 17, 2026.

One labeling quirk matters. The structured detail table for expected cash flows labels the employer-contribution rows "2024", while the note's own text labels the same rows "2026". The excerpt uses the note's text, and the worksheet treats those rows as expected 2026 contributions.

All amounts are in USD millions. The measurement date is December 31 for both years, and the filing date is kept apart from the period end.

Accessing the data through Claude

Add the FMP MCP server in Claude under Settings, Connectors, Add custom connector, with this URL and your API key in place of YOUR_FMP_API_KEY:

https://financialmodelingprep.com/mcp?apikey=YOUR_FMP_API_KEY

Run both prompts in one new conversation with web search off. Prompt 2 already contains the excerpts, so no filing lookup is needed.

The run shown below took place on November 9, 2026, in a single Claude conversation.

Running the worksheet in Claude

Two prompts keep the sources apart. Prompt 1 uses FMP only and shows what the standardized responses can and cannot provide. Prompt 2 works only from the excerpts pasted into it, so every pension figure in its output traces to a named excerpt. A later run applies the same rules, but FMP's records can change, so its tables can differ.

Prompt 1: Set the company context from FMP

Using Financial Modeling Prep through the connected FMP MCP server, set up

the company context for a pension review of United Parcel Service (UPS),

fiscal years 2025 and 2024.

Objective

Record the standardized balance-sheet and cash-flow figures that frame the

pension review, and report whether any field in the two responses tested

isolates pension amounts.

Data rules

- Use only the FMP statements tool: balance-sheet-statement and

cashflow-statement, symbol UPS, period annual, limit 2. If fiscal 2024

is not returned, raise the limit until it is.

- Do not use filings or web search in this step.

- Retry a failed request once; report Unavailable if still missing.

Steps

1. Record totalLiabilities, otherNonCurrentLiabilities,

totalStockholdersEquity, accumulatedOtherComprehensiveIncomeLoss and

netCashProvidedByOperatingActivities, in USD millions.

2. List every field name in the two responses that refers to pensions or

postretirement benefits. If there is none, write "None returned".

3. In the last column, write only "Not returned separately" or "Returned

separately" for pension content. Do not infer what a field contains

from its name.

4. Do not estimate any pension amount from these fields.

Output

Start with a short run summary: run date and UTC time (if no clock is

available, write "time not captured"), operations called, number of fields

returned in each response and any limitation.

Table 1: Field | 2025 | 2024 | Pension content

Add a final row for the pension-specific field check, showing "None

returned" or the field names.

After the table, state in one sentence whether any field in the two

responses tested isolates pension amounts. Do not generalize to other FMP

endpoints.

What Prompt 1 returned

Claude's run summary recorded the run date (November 9, 2026, time not captured) and the two operations called, balance-sheet-statement and cashflow-statement for UPS, annual, limit 2, one call each. The balance-sheet response returned 61 fields per record and the cash-flow response 47. Both returned FY2025 (period end 2025-12-31, filed 2026-02-17) and FY2024 (period end 2024-12-31, filed 2025-02-18). No limit increase or retry was needed, reportedCurrency was USD, and values were converted from dollars to USD millions. Its one limitation: only standardized fields were used, with no filings or web search, and no pension amount was estimated.

Table 1. FMP company context for UPS (USD millions)

Field	2025	2024	Pension content
totalLiabilities	56,835	53,327	Not returned separately
otherNonCurrentLiabilities	10,306	10,210	Not returned separately
totalStockholdersEquity	16,227	16,718	Not returned separately
accumulatedOtherComprehensiveIncomeLoss	(4,208)	(4,309)	Not returned separately
netCashProvidedByOperatingActivities	8,450	10,122	Not returned separately
Pension-specific field check (balance sheet and cash flow)	None returned	None returned	None returned

Claude's closing sentence: no field in the balance-sheet-statement or cashflow-statement responses for UPS (FY2025 and FY2024) tested isolates pension amounts.

Table 1 sets the scale of the company and nothing more. Standardization maps each filer's line items into a common set of fields, a process examined in how to reconcile standardized and as-reported financial statements, and every pension figure in the worksheet comes from the filing excerpts in the next step.

Prompt 2: Build the worksheet from the supplied excerpts

Prompt 2 carries the complete excerpts, so a reader can paste it as written and get the same inputs. It states the scope, the aggregation rule and the citation rule, tells Claude which excerpt each figure comes from, and keeps expected contributions apart from actual ones. The excerpts follow the instructions inside the same prompt.

Continue the UPS pension review. The excerpts below were copied from the

UPS 2025 Form 10-K (fiscal year ended December 31, 2025, filed February

17, 2026), as returned by the FMP financial-reports-form-10-k-json

operation (symbol UPS, year 2025, period FY). Use only these excerpts for

pension figures.

Scope

The worksheet covers three company-sponsored plan groups in Note 5: U.S.

pension benefits, U.S. postretirement medical benefits and international

pension benefits. It does not cover other UPS retirement arrangements,

such as defined contribution plans or multiemployer plans.

Objective

Build a two-period worksheet (2025 and 2024) for each plan group, keeping

expense, actual contributions, expected contributions and funded status

separate.

Data rules

- Keep the three plan groups in separate rows. Report funded status, plan

assets, benefit obligations and review labels for each group and year.

Never sum or net them across groups.

- The only cross-group totals are expense and actual contributions, and

only for the comparison in step 4 with the two cash-flow statement

lines. Never add expected contributions to actual contributions.

- Cite the source of every figure by putting the excerpt letter in square

brackets after it, for example 43,689 [A]. After a calculated figure,

give the letters of its inputs, for example -4,783 [A]. Table 2 maps

each letter to its source table. A figure that appears in no excerpt is

Unavailable.

- Funded status = fair value of plan assets - benefit obligation. Keep the

sign shown in the excerpts: a deficit is negative.

- Actual contributions are "Employer contributions" in the plan-asset

reconciliation (excerpt B). Expected 2026 contributions (excerpt D) are

a forecast. Show them in their own column.

- Do not assume contributions equal any one cash-flow line. Test it.

- Do not use FMP or web search in this step.

Steps

1. List each excerpt with its letter, source table and the figures it

gives.

2. For each group and year, calculate funded status. Compare it with the

disclosed figure and with the sum of the balance-sheet lines (other

non-current assets + other current liabilities + pension and

postretirement benefit obligations, signed as in excerpt A).

3. For each group and year, record net periodic benefit cost (excerpt C)

and employer contributions (excerpt B), and show the actuarial (gain)

loss line from excerpt C beside the expense. Add expected 2026

contributions to plan trust and to plan participants (excerpt D).

4. Total expense and actual contributions across the three groups for each

year. Compare the expense total with "Pension and postretirement

benefit (income) expense" and the contributions total with the

absolute value of "Pension and postretirement benefit contributions"

in excerpt E, which shows contributions as a negative outflow.

5. For each group and in total, calculate the change from 2024 to 2025

(2025 minus 2024; negative means a decline) in expense and in actual

contributions. Also show the 2024 actuarial (gain) loss and the 2024

expense without it (2024 net periodic benefit cost minus the 2024

actuarial (gain) loss line), as arithmetic only. Do not state a cause

for any change.

6. Assign a label to each group-year row: Reconciled (calculated and

disclosed funded status are equal, and the balance-sheet lines sum to

the same figure); Explained difference (they differ by an amount the

excerpts identify); Review required (a difference remains unexplained,

or a figure lacks an excerpt letter).

7. For plan coverage use the descriptions in excerpt F. For the obligation

definition use the term the excerpts give: projected benefit

obligation, or accumulated postretirement benefit obligation where

excerpt A states it.

Output

Table 2: Excerpt | Source table | Figures supplied

Table 3: Plan group | Year | Plan assets | Benefit obligation |

Calculated funded status | Disclosed funded status | Balance-sheet lines |

Label

Table 4: Plan group | Expense 2025 | Expense 2024 | Actual contributions

2025 | Actual contributions 2024 | Expected contributions 2026

Add a Total row for expense and actual contributions only, and a row with

the two excerpt E cash-flow lines.

Table 5: Plan group | Year | Plan coverage | Obligation definition | Plan

assets | Calculated funded status | Disclosed funded status | Expense |

Actual contributions | Sources | Review notes

Table 6: Plan group | Expense change | Contribution change | 2024

actuarial (gain) loss | 2024 expense without it | 2025 expense

Rows: the three groups and a total.

Do not forecast funding, model cash needs or add the deficit to debt.

Excerpts from the UPS 2025 Form 10-K

Amounts are USD millions unless stated. Parentheses show negative amounts.

nil means the filing shows a dash in that cell.

Excerpt A. Note 5, Company-Sponsored Employee Benefit Plans, table

"Funded Status"

Lead-in: "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):"

Columns: U.S. Pension Benefits 2025 | 2024 | U.S. Postretirement Medical

Benefits 2025 | 2024 | International Pension Benefits 2025 | 2024

Funded Status:

Fair value of plan assets | 43,689 | 41,499 | 72 | 119 | 1,873 | 1,778

Benefit obligation | (48,472) | (46,559) | (1,822) | (1,850) | (1,609) | (1,500)

Funded status recognized as of December 31 | (4,783) | (5,060) | (1,750) |

(1,731) | 264 | 278

Funded Status Recognized in our Balance Sheets:

Other non-current assets | nil | nil | nil | nil | 484 | 480

Other current liabilities | (28) | (27) | (148) | (100) | (10) | (7)

Pension and postretirement benefit obligations | (4,755) | (5,033) |

(1,602) | (1,631) | (210) | (195)

Net liability as of December 31 | (4,783) | (5,060) | (1,750) | (1,731) |

264 | 278

(The rows on amounts recognized in AOCI are omitted.)

Related Note 5 text: "The accumulated postretirement benefit obligation

presented in the funded status table exceeds plan assets for all U.S.

postretirement medical benefit plans."

Related Note 5 text: "Benefit payments under the pension plans include $39

and $37 million paid from employer assets for 2025 and 2024, respectively.

Benefit payments (net of participant contributions) under the

postretirement medical benefit plans include $179 and $264 million paid

from employer assets for 2025 and 2024, respectively. Such benefit

payments from employer assets are also categorized as employer

contributions."

Excerpt B. Note 5, table "Reconciliation of the Changes in the Plans'

Benefit Obligations and Fair Value of Plan Assets"

Lead-in: "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):"

Columns: as in excerpt A.

Benefit Obligations:

Projected benefit obligation at beginning of year | 46,559 | 47,712 | 1,850 |

1,974 | 1,500 | 1,601

Service cost | 1,124 | 1,240 | 17 | 20 | 37 | 42

Interest cost | 2,718 | 2,574 | 109 | 109 | 65 | 66

Gross benefits paid | (2,678) | (2,604) | (241) | (284) | (64) | (55)

Plan participants' contributions | nil | nil | nil | 39 | 4 | 4

Plan amendments (1) | 116 | 76 | nil | nil | nil | nil

Actuarial (gain)/loss | 633 | (2,438) | 87 | (7) | (42) | (58)

Foreign currency exchange rate changes | nil | nil | nil | nil | 108 | (99)

Curtailments and settlements | nil | nil | nil | nil | (2) | (4)

Other | nil | (1) | nil | (1) | 3 | 3

Projected benefit obligation at end of year | 48,472 | 46,559 | 1,822 |

1,850 | 1,609 | 1,500

Footnote (1): "Plan amendments in 2025 were related to the collective

bargaining agreement with the Independent Pilots Association. Plan

amendments in 2024 were related to collective bargaining agreements with

the Teamsters."

Fair Value of Plan Assets:

Fair value of plan assets at beginning of year | 41,499 | 43,491 | 119 | 98 |

1,778 | 1,893

Actual return (loss) on plan assets | 3,708 | (615) | 10 | (2) | 25 | 41

Employer contributions | 1,159 | 1,228 | 183 | 269 | 19 | 27

Plan participants' contributions | nil | nil | nil | 39 | 4 | 4

Gross benefits paid | (2,678) | (2,604) | (241) | (284) | (64) | (55)

Foreign currency exchange rate changes | nil | nil | nil | nil | 114 | (118)

Curtailments and settlements | nil | nil | nil | nil | (2) | (4)

Other | 1 | (1) | 1 | (1) | (1) | (10)

Fair value of plan assets at end of year | 43,689 | 41,499 | 72 | 119 |

1,873 | 1,778

Excerpt C. Note 5, table "Net Periodic Benefit Cost" (the response's

section title: "Net Periodic Benefit Cost for Company Sponsored Pension and

Postretirement Benefit Plans", USD millions)

Columns: U.S. Pension Benefits 2025 | 2024 | 2023 | U.S. Postretirement

Medical Benefits 2025 | 2024 | 2023 | International Pension Benefits 2025 |

2024 | 2023

Net Periodic Benefit Cost:

Service cost | 1,124 | 1,240 | 1,172 | 17 | 20 | 20 | 37 | 42 | 43

Interest cost | 2,718 | 2,574 | 2,508 | 109 | 109 | 116 | 65 | 66 | 66

Expected return on plan assets | (3,130) | (3,085) | (2,967) | (7) | (4) |

(12) | (82) | (83) | (84)

Amortization of prior service cost | 156 | 152 | 106 | 1 | 1 | 2 | 1 | 1 | 1

Actuarial (gain) loss | nil | 673 | 393 | nil | nil | nil | nil | (8) | (42)

Curtailment and settlement (gain) loss | nil | nil | nil | nil | nil | nil |

nil | nil | 8

Net periodic benefit cost | 868 | 1,554 | 1,212 | 120 | 126 | 126 | 21 | 18 |

(8)

Excerpt D. Note 5, table "Expected Cash Flows"

Lead-in: "Information about expected cash flows for our pension and

postretirement medical benefit plans is as follows (in millions):"

Columns: U.S. Pension Benefits | U.S. Postretirement Medical Benefits |

International Pension Benefits

Expected Employer Contributions:

2026 to plan trust | 1,080 | 5 | 8

2026 to plan participants | 29 | 183 | 10

(The Expected Benefit Payments rows are omitted.)

Related Note 5 text: "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."

Excerpt E. Consolidated statements of cash flows (the response's section

title: "STATEMENTS OF CONSOLIDATED CASH FLOWS", USD millions)

Columns: Dec. 31, 2025 | Dec. 31, 2024 | Dec. 31, 2023

Cash Flows From Operating Activities:

Adjustments to reconcile net income to net cash from operating activities:

Pension and postretirement benefit (income) expense | 1,009 | 1,698 | 1,330

Pension and postretirement benefit contributions | (1,361) | (1,524) | (1,393)

Net cash from operating activities | 8,450 | 10,122 | 10,238

(Other lines are omitted.)

Excerpt F. Note 5, plan descriptions

"We sponsor various retirement, postretirement and pension plans,

including defined benefit and defined contribution plans, which cover our

employees worldwide."

"In the U.S. we maintain the following single-employer defined benefit

pension plans:" the UPS Retirement Plan, the UPS Pension Plan, the UPS/IBT

Full-Time Employee Pension Plan and the UPS Excess Coordinating Benefit

Plan.

"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."

"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."

What Prompt 2 returned

Claude opened with a short result summary. All six group-year rows are Reconciled: calculated funded status equals the disclosed figure, and the balance-sheet lines sum to the same figure in each case. Total expense across the three groups equals the excerpt E expense line in both years (1,009 and 1,698), and total actual contributions equal the absolute value of the excerpt E contributions line (1,361 and 1,524). It noted that no FMP or web calls were made in this step and that its arithmetic treats "nil", a dash in the filing, as no amount, which is a presentation choice and not a verified zero. Tables 3 to 5 are split into smaller tables below for readability; every figure, label and citation is as Claude returned it.

Table 2. Excerpts supplied

Excerpt	Source table	Figures supplied
A	Note 5, Funded Status	Plan assets, benefit obligation, funded status and balance-sheet lines, 2025 and 2024, by group. Text: APBO exceeds plan assets for all U.S. postretirement medical plans. Benefit payments from employer assets: pensions 39 (2025) and 37 (2024); postretirement medical 179 and 264.
B	Note 5, Reconciliation of Benefit Obligations and Plan Assets	Obligation and asset roll-forwards, 2025 and 2024, including Employer contributions and the Actuarial (gain)/loss on obligations
C	Note 5, Net Periodic Benefit Cost	Cost components and net periodic benefit cost, 2025 to 2023, including the Actuarial (gain) loss line
D	Note 5, Expected Cash Flows	Expected 2026 employer contributions to plan trust and to plan participants, by group
E	Consolidated statements of cash flows	Pension and postretirement benefit (income) expense and contributions lines; net cash from operating activities
F	Note 5, plan descriptions	Plan coverage descriptions

Five of the six sources are Note 5 tables or note text. Only excerpt E comes from the cash-flow statement, which is why the citation rule names it separately.

Table 3a. Funded status, calculated and disclosed (USD millions)

Plan group and year	Plan assets	Benefit obligation	Calculated funded status	Disclosed funded status
U.S. pension, 2025	43,689 [A]	-48,472 [A]	-4,783 [A]	-4,783 [A]
U.S. pension, 2024	41,499 [A]	-46,559 [A]	-5,060 [A]	-5,060 [A]
U.S. postretirement medical, 2025	72 [A]	-1,822 [A]	-1,750 [A]	-1,750 [A]
U.S. postretirement medical, 2024	119 [A]	-1,850 [A]	-1,731 [A]	-1,731 [A]
International pension, 2025	1,873 [A]	-1,609 [A]	264 [A]	264 [A]
International pension, 2024	1,778 [A]	-1,500 [A]	278 [A]	278 [A]

Table 3b. Balance-sheet tie-out and review label (USD millions)

Plan group and year	Other non-current assets	Other current liabilities	Pension and postretirement benefit obligations	Total	Label
U.S. pension, 2025	0 [A]	-28 [A]	-4,755 [A]	-4,783 [A]	Reconciled
U.S. pension, 2024	0 [A]	-27 [A]	-5,033 [A]	-5,060 [A]	Reconciled
U.S. postretirement medical, 2025	0 [A]	-148 [A]	-1,602 [A]	-1,750 [A]	Reconciled
U.S. postretirement medical, 2024	0 [A]	-100 [A]	-1,631 [A]	-1,731 [A]	Reconciled
International pension, 2025	484 [A]	-10 [A]	-210 [A]	264 [A]	Reconciled
International pension, 2024	480 [A]	-7 [A]	-195 [A]	278 [A]	Reconciled

Claude showed the balance-sheet lines as other non-current assets + other current liabilities + pension and postretirement benefit obligations. The three groups are never added to one another, so the worksheet states no combined funded status.

Table 4a. Expense and actual contributions (USD millions)

Plan group	Expense 2025	Expense 2024	Actual contributions 2025	Actual contributions 2024
U.S. pension	868 [C]	1,554 [C]	1,159 [B]	1,228 [B]
U.S. postretirement medical	120 [C]	126 [C]	183 [B]	269 [B]
International pension	21 [C]	18 [C]	19 [B]	27 [B]
Total (expense and actual contributions only)	1,009 [C]	1,698 [C]	1,361 [B]	1,524 [B]
Excerpt E cash-flow lines (contributions as absolute value)	1,009 [E]	1,698 [E]	1,361 [E]	1,524 [E]

Table 4b. Expected 2026 employer contributions, a forecast kept apart from actual contributions (USD millions)

Plan group	To plan trust	To plan participants
U.S. pension	1,080 [D]	29 [D]
U.S. postretirement medical	5 [D]	183 [D]
International pension	8 [D]	10 [D]
Total	Not totaled	Not totaled

Claude's three notes on the table: the expense total minus the excerpt E expense line is 0 in both years, the contributions total minus the absolute value of the excerpt E contributions line is 0 in both years, and these are numerical matches, since excerpt E does not itself state what each line includes. That match was tested, not assumed. A company whose contributions are paid by a subsidiary, made in shares or netted against other benefits would not match.

Table 5a. Plan coverage and obligation definition

Plan group	Plan coverage [F]	Obligation definition
U.S. pension	Single-employer defined benefit plans: UPS Retirement Plan, UPS Pension Plan, UPS/IBT Full-Time Employee Pension Plan, UPS Excess Coordinating Benefit Plan	Projected benefit obligation
U.S. postretirement medical	Non-union retirees and select union retirees not otherwise covered by multiemployer plans	Accumulated postretirement benefit obligation
International pension	Defined benefit plans for certain international employees, mainly Canada and the United Kingdom	Projected benefit obligation

Table 5b. Worksheet figures, 2025 and 2024 (USD millions)

Plan group and year	Plan assets [A]	Calculated funded status [A]	Disclosed funded status [A]	Expense [C]	Actual contributions [B]
U.S. pension, 2025	43,689	-4,783	-4,783	868	1,159
U.S. pension, 2024	41,499	-5,060	-5,060	1,554	1,228
U.S. postretirement medical, 2025	72	-1,750	-1,750	120	183
U.S. postretirement medical, 2024	119	-1,731	-1,731	126	269
International pension, 2025	1,873	264	264	21	19
International pension, 2024	1,778	278	278	18	27

Table 5c. Review notes

Plan group and year	Review notes
U.S. pension, 2025	Reconciled. Actuarial (gain) loss line: nil [C]. Plan amendments of 116 in obligation roll-forward [B].
U.S. pension, 2024	Reconciled. Actuarial loss in expense: 673 [C].
U.S. postretirement medical, 2025	Reconciled. Obligation exceeds plan assets [A]. Excerpt B labels this row "Projected benefit obligation"; excerpt A text is followed here.
U.S. postretirement medical, 2024	Reconciled. Actuarial (gain) loss line: nil [C].
International pension, 2025	Reconciled. Balance-sheet lines include an asset of 484 and liabilities of 10 and 210 [A].
International pension, 2024	Reconciled. Actuarial (gain) in expense: -8 [C].

Table 6. Change 2024 to 2025 (2025 minus 2024; negative means a decline; USD millions)

Plan group	Expense change	Contribution change	2024 actuarial (gain) loss	2024 expense without it	2025 expense
U.S. pension	-686 [C]	-69 [B]	673 [C]	881 [C]	868 [C]
U.S. postretirement medical	-6 [C]	-86 [B]	nil [C]	126 [C]	120 [C]
International pension	3 [C]	-8 [B]	-8 [C]	26 [C]	21 [C]
Total	-689 [C]	-163 [B]	665 [C]	1,033 [C]	1,009 [C]

Claude added that no cause is stated for any change. In the U.S. pension group, 673 of the 686 decline in expense sits in the 2024 actuarial loss line: without it, 2024 expense would have been 881, against 868 in 2025.

Claude's limitations and review actions:

Label scope: Reconciled covers the funded-status tie-out only. It does not test the obligation or asset roll-forwards in excerpt B.
Group scope: The three groups were kept separate. The international row combines plans with a recognized asset (484 in 2025) and plans with liabilities (220 in 2025), as shown in excerpt A. The excerpts do not split these further.
Employer-paid benefits: Excerpt A states that benefit payments from employer assets are also categorized as employer contributions. It gives the pension amounts (39 and 37) for pension plans combined, not by group, so they are not allocated here.
Expected contributions: The 2026 amounts are a forecast and stay in their own column. They were not added to actual contributions.
Next review action: Confirm the nil cells against the filing page, since the dash was converted to "nil" in the supplied excerpts. Then decide whether the omitted AOCI and expected benefit payment rows are needed for the next step.

Reading the worksheet

Both series fell in 2025, by different amounts. Expense across the three groups dropped by 689, from 1,698 to 1,009, while actual contributions dropped by 163, from 1,524 to 1,361 (Table 6). An accounting charge fell about four times as much as the cash paid, so neither can stand in for the other.

Most of the expense decline sits in one line. U.S. pension expense fell by 686, and 2024 included an actuarial loss of 673 that does not appear in 2025. Without it, 2024 expense would have been 881 against 868 in 2025, a drop of 13. That is arithmetic from the note's cost components. The excerpts do not say why the loss arose, and the worksheet assigns no cause. Contributions in the same group fell by only 69, from 1,228 to 1,159.

The U.S. pension deficit narrowed from 5,060 to 4,783. In the roll-forward (excerpt B), plan assets rose by 2,190, from 41,499 to 43,689, including an actual return of 3,708, while the obligation rose by 1,913, from 46,559 to 48,472, including an actuarial loss of 633. The 277 improvement therefore came from both sides moving, and not from contributions of 1,159 alone.

Operating cash flow of 8,450 in 2025 (Table 1) already reflects the contributions. In the cash-flow statement (excerpt E), pension expense of 1,009 is added back and contributions of 1,361 are deducted within operating activities, and the two adjustments net to a reduction of 352. Table 4 shows those two lines equal the Note 5 totals, so the contributions are already deducted within the 8,450 and do not remain to be paid out of it.

The retiree medical plan behaves differently. Its assets are small, 72 at the end of 2025, so the company pays most benefits directly. Excerpt A states that benefit payments from employer assets are categorized as employer contributions, and 179 of the 183 contributed in 2025 were of that kind. The 2026 expectation of 183 paid to participants follows the same pattern, but it remains a forecast until next year's note reports the actual figure.

The nil cells in the excerpts are dashes in the printed note. FMP's structured detail tables return them as 0, which indicates they are tagged zero amounts rather than missing figures. Two limits remain from the run. The Reconciled label covers only the funded-status tie-out, and the international surplus of 264 combines plans in surplus (484) with plans in deficit (220).

None of these deficits is added to debt here. How a funded status should enter an enterprise value or leverage comparison depends on the valuation method, a choice discussed in detecting valuation disconnects through integrated fundamental and market analysis, and falls outside this worksheet. A debt-based screen such as assessing refinancing risk across corporate portfolios counts balance-sheet debt only, so a pension deficit would need to be added there deliberately.

When analyst review is required

Mark a row Review required, with the reason, when any of these apply:

calculated and disclosed funded status differ and the excerpts do not explain the gap;
the balance-sheet lines do not sum to the disclosed funded status;
a pension figure cannot be tied to an excerpt letter and its source table;
an excerpt presents only a combined figure for groups that use different obligation measures;
two sections of the same filing label the same figure differently, as the expected-contribution years are labeled in this response, and the excerpt does not say which label it follows.

The next step is to reread the relevant table in the filing, or the prior year's note for the comparative, before the row is used.

Carrying the worksheet forward

When UPS files its 2026 10-K, rerun Prompt 2 with the new Note 5 excerpts and replace the 2026 expectation in Table 4 with the actual contribution. Keep the 2024 rows as a comparative check: if the 2026 10-K restates any 2025 figure, the change will show against this worksheet.

To apply the worksheet to another company, change the symbol and filing year in the Financial Reports Form 10-K JSON API call, copy that company's pension tables and cash-flow lines into the excerpts, and rewrite the scope line, because plan groups and obligation measures differ from one company to the next.

For portfolio monitoring, record each 10-K's filing date beside the worksheet. Pension figures are only known once the annual filing is public, a timing question handled in the as-of-date fundamental screen workflow. Companies whose fiscal year ends away from December can also carry a measurement date that differs from the period end, which calls for the same date discipline described in aligning earnings dates, fiscal quarters and reported results.

To run the workflow on your own coverage list, connect the FMP MCP server in Claude and review the Financial Reports Form 10-K JSON API documentation for the parameters used here.

Tags:Model Builds

About the Author

Pranjal Saxena

Financial APIs, Claude MCP, and AI-driven research workflows

Pranjal Saxena writes technical content focused on financial data APIs, Claude MCP workflows, AI-driven research systems, and Python-based market analysis. For FMP, his work centers on turning structured financial data into practical, workflow-driven content for developers, analysts, and fintech teams. He combines experience in data science, NLP, generative AI, and financial API workflows to show how APIs, automation, and AI-assisted systems can support modern financial research and analysis.

View all articles

Financial data for every need

Real-time quotes and 30+ years of historical data, including prices, fundamentals, and insider transactions — all accessible via API.

Create Free Account