CFO
Menu
  • Accounting & Tax
  • Banking & Capital Markets
  • Growth Companies
  • Human Capital & Careers
  • Risk & Compliance
  • Strategy
  • Technology
  • Sign InSign Up
CFO
  • Conferences
  • Webcasts
  • Research
  • White Papers
  • Jobs
  • Training
  • Newsletters
  • Magazine
CFO
The Ongoing Evolution of FP&A
Global Survey Identifies 7 Key Insights
Usage of Variance Analysis Is, Well, Variable
While it's not debatable that variance analysis is…
Does Diversity Pay Off?
CFOs Look to Quantify Inclusion Initiatives
  • Accounting & Tax
  • Banking & Capital Markets
  • Risk & Compliance
  • Human Capital & Careers
  • Growth Companies
  • Strategy
  • Technology
Human Capital & Careers

Mo’ Pension Plan Blues

IBM, Honeywell take charges to buttress underfunded retirement plans.

Stephen Taub
January 3, 2003 | CFO.com | US
share
Tweet
Print

Email this article

The three-year bear market continues to mar the pension plans of some of the oldest, largest companies.

For example, earlier this week IBM. said it contributed $3.95 billion to its U.S. pension plan, enabling it to return to fully funded status, as measured by its accumulated benefit obligation (ABO).

Recommended Stories:
  • Defined Benefits, Loose Accounting
  • Funding Fun House
  • Trade Policy Jitters Fuel Decline in Solar Jobs

Big Blue contributed $2.09 billion in cash and the rest in IBM common stock.

The company concedes the contribution was greater than the $3 billion it estimated in early December due to the performance of the capital markets, which decreased the value of the pension plan’s assets in the intervening weeks.

“Our free cash flow and our balance sheet are strong enough for us to fully fund the U.S. pension plan,” said IBM chief financial officer John R. Joyce in a statement. “At the same time, we made a number of strategic investments throughout the year to better position our company to meet the changing requirements of our customers in this new ‘ebusiness on demand’ world.”

IBM’s pension fund is hardly the most underfunded of all U.S. companies. In early December management at Ford Motor said it expected the company’s pension fund to be underfunded by about $6.2 billion at the end of 2002.

Meanwhile, earlier this week, Honeywell reported it contributed $700 million in stock to its pension fund, bringing the total to $800 million for 2002. In September the company contributed $100 million in cash to the pension funds.

Honeywell estimates it could take a charge of up to $1.7 billion on shareholders’ equity because the fair value of the pension plan’s assets is less than the obligation.

Post navigation

← 2002: Debt Valley Days
Where Are They Now? →

Leave a Reply Cancel reply

Your email address will not be published. Required fields are marked *

Advertisement

Popular Articles

  1. 10 Habits of Highly Effective CFOs
  2. No Mystery How to Restrain Health Costs
  3. Zero-based Budgeting Is Surging
  4. Pay Ratio Disclosures Mislead Investors
  5. No More Tax Deductions for Bad Actions
Advertisement
 

Topics

  • Accounting & Tax
  • Banking & Capital Markets
  • Human Capital & Careers
  • Growth Companies
  • Risk & Compliance
  • Strategy
  • Technology

Media

  • Videos
  • Whitepapers
  • Research
  • Magazine

Events

  • Conferences
  • Argyle Events
  • Webcasts

Services

  • Reprints
  • Back Issues
  • Mobile
  • Widgets
  • RSS

About CFO

  • About CFO
  • Editorial Staff
  • Press
  • Advertise
  • Contact Us

Want the Magazine?

Relax and unplug with our award-winning coverage.

Subscribe Now
Follow Us