United Parcel Service offered its pilots annual pay raises of 3 percent and bonuses of as much as USD$5,000 to sign a new, eight year contract, the pilots' union said on Thursday.

In a letter to the package delivery company's 2,500 pilots, the Independent Pilots Association outlined what it described as UPS's most recent offers, made during mediation supervised by the federal government.

The letter asked members to reject the company's proposals and authorize the union to request an end to mediation. Last month, the mediator called an indefinite recess after the two sides failed to resolve their nearly three-year-old dispute.

UPS spokesman Norman Black declined to comment on the union's description of its latest proposals, but said the company had not yet made its last and best offer. "It is improper to characterize bits and pieces of discussions with a mediator as constituting our offer to pilots," Black said.

UPS has said its pilots are among the best paid in the aviation industry, with average salaries of USD$175,000. The company operates the world's ninth-largest airline.

The union, in the letter, said the latest UPS proposals would amount to a pay cut, when other items like health insurance cost increases are considered. It said members would vote during August on whether to authorize the union to request to be released from mediation.

Despite any authorization, federal law requires both sides to remain at the table until released by the mediator.