The agreement, reached Sept. 30, was ratified by slightly more than 65 percent of Teamsters voting, the union said.

The union, which has its headquarters in Washington, said it would meet with members of five groups that voted against the agreement to identify and address their concerns.

The new contract takes effect Aug. 1, 2008.

Atlanta's UPS is the Teamsters' largest employer, accounting for nearly 240,000 drivers, clerks and package sorters. UPS, the world's biggest package-shipping company, has a total of 427,700 employees.

The agreement lets UPS withdraw from the Central States Fund, a multi-employer pension plan for 42,000 Teamster members, after paying $6.1 billion before taxes to the fund.

UPS said it would move the employees into a single-employer pension fund jointly administered by UPS management and the Teamsters.

Starting pay will climb to $16.10 an hour from $14.70. Hourly pay for workers with 24 months' seniority will increase to $20.75 from $18.90.

The union did not provide information about changes to top pay.