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PBGC: TOP 50 COMPANIES SHOW CONTINUED GROWTH IN PENSION UNDERFUNDING

 WASHINGTON, Nov. 22 /PRNewswire/ -- For the fifth year in a row, pension underfunding increased in the Pension Benefit Guaranty Corporation's (PBGC) annual list of 50 companies with the largest underfunded pension plans. The total underfunding listed increased from $29.1 billion in 1991 to $38 billion in 1992, $31.7 billion of which is guaranteed by PBGC.
 "These results underscore the need for pension funding reforms and provide additional evidence that current law is not working. The Clinton administration has reforms now before Congress to strengthen the law and to improve pension security," said PBGC Executive Director Martin Slate.
 Since PBGC first published the list, the growth in pension liabilities has outpaced assets, thereby increasing underfunding. In 1992, underfunding increased primarily because of the fall in interest rates but, at the same time, funding by many companies did not keep pace with growing liabilities because of weaknesses in the law.
 "With interest rates declining, companies should have been contributing larger amounts to their pension plans to keep their liabilities manageable. Our reforms will require it. We want to make sure that workers receive the benefits for which they have worked," said Slate.
 In comparing the 38 companies that were listed last year and this year, even if interest rates had stayed constant, underfunding still would have grown for 17 of the companies, which represent 71 percent of the list's total underfunding. For 14 companies, the underfunding would have decreased at constant interest rates, but contributions were not sufficient to keep up with the fall of interest rates.
 Seven companies did keep pace with their growing liabilities and, in some cases, reduced their underfunding, even with the falling interest rates. Chrysler, for example, reduced pension underfunding by over $3 billion through additional contributions beyond those required and LTV reduced its underfunding by over $700 million.
 Twelve companies that were among the 50 companies last year are not on this year's list. Among them, Sharon Steel terminated its five underfunded plans and 10 other companies left the list because of improved funding or their underfunding was below the lowest amount listed.
 Most pension plans in this country are fully funded to pay all the benefits promised by employers. Still, some lack sufficient funds to pay all that is owed, and underfunding continues to be concentrated in a few industries, primarily auto and steel. On the list, the auto industry with $18 billion of underfunding represents 57 percent of the total underfunding listed; the steel industry's almost $7 billion underfunding is 21 percent of the total.
 Inclusion on the list does not reflect on a company's financial health nor does it necessarily mean that a participant's benefits are in immediate jeopardy. However, the risk is greater when underfunding occurs in plans of troubled companies. Although a majority of retirees are fully covered if their plan terminates, there are limits to PBGC's guarantee.
 "Many companies on the list are strong and will be able to fund their pension plans. However, to better prepare themselves for retirement, participants should know more about their plan's funding and PBGC's guarantees," said Slate.
 The list reflects the 50 companies with the largest underfunding amounts -- at least $79 million -- but not necessarily the worst funding ratios of underfunded pension plans. Also, it aggregates only underfunded plans. If a company has overfunded plans, they are not netted against the underfunded plans because there is no legal right for the PBGC or a participant in an underfunded plan to claim assets of an overfunded plan.
 Under current law, employers can minimize their contributions by using more optimistic retirement age, mortality and interest rate assumptions given current flexibility in the law. The Securities and Exchange Commission recently recommended to the Financial Accounting Standards Board that companies use more current discount rates to value their pension liabilities. These rates will be closer to those used by PBGC in determining pension liabilities. PBGC's reforms specify the interest rates and mortality assumptions to be used in determining pension contributions.
 The administration's reforms, the Retirement Protection Act of 1993, were introduced as HR 3396 by Reps. William D. Ford (D-Mich.) and Dan Rostenkowski (D-Ill.) on Oct. 28. In addition to strengthening funding rules, the administration's proposals would enhance PBGC compliance authority, raise premiums for plans providing the greatest risk to the system and require companies with underfunded plans to provide workers and retirees easy-to-understand information on a plan's funding status and PBGC guarantees.
 PBGC is a federal insurance corporation created under the Employee Retirement Income Security Act of 1974 to guarantee payment of basic pension benefits earned by American workers and retirees participating in private defined benefit pension plans. PBGC administers two insurance programs which cover more than 41 million workers and retirees in about 67,000 pension plans.
 TOP 50 COMPANIES WITH THE LARGEST UNFUNDED PENSION LIABILITY
 Vested Unfunded
 Benefit Vested
 Company Name Assets Liability Benefit
 Ravenswood Aluminum Corp. $ 11 $ 106 $ 95
 LTV Corp. 1,273 3,375 2,102
 New Valley Corp. 269 698 429
 Tenneco Inc. 195 444 249
 Keystone Consolidated Industries, Inc. 95 215 120
 Loews Corp. 159 328 170
 Uniroyal Goodrich Tire Co. 517 1,018 501
 Laclede Steel Co. 115 216 101
 Rockwell International Corp. 462 842 380
 Trans World Airlines, Inc. 592 1,071 479
 Bridgestone-Firestone, Inc. 303 547 245
 Anchor Glass Co. 170 296 126
 ACF Industries, Inc. 124 214 90
 Bethlehem Steel Corp. 3,426 5,857 2,431
 PacifiCorp. 473 736 262
 White Consolidated Industries, Inc. 253 388 136
 Clark Equipment Co. 181 276 95
 Maxxam Inc. 586 888 302
 General Motors Corp. 39,572 59,754 20,182
 American National Can Co. 1,092 1,637 546
 Budd Co. 362 535 173
 Mack Trucks, Inc. 401 583 183
 Allegheny Ludlum Corp. 323 466 143
 Rohr, Inc. 347 493 146
 Crown Cork & Seal Co., Inc. 840 1,179 339
 Goodrich (B.F.) Co. 386 537 151
 James River Corp. of Virginia 266 370 104
 Bull HN Information Systems, Inc. 350 483 133
 Armco Steel Company, L.P. 709 1,037 328
 National Intergroup, Inc. 532 719 187
 CSX Corp. 812 1,080 268
 Westinghouse Electric Corp. 3,918 5,189 1,271
 Reynolds Metals Co. 943 1,248 304
 PPG Industries, Inc. 924 1,203 279
 Goodyear Tire & Rubber Co. 1,276 1,622 346
 Navistar International Corp. 2,070 2,614 544
 Northwest Airlines, Inc. 1,212 1,523 311
 Woolworth Corp. 546 664 118
 Allied Signal Inc. 607 740 133
 Ceridian Corp. 565 685 120
 National Steel Corp. 962 1,157 194
 Deere & Co. 1,367 1,617 250
 Warner-Lambert Co. 1,026 1,209 183
 Honeywell Inc. 2,162 2,530 368
 Armco Inc. 1,790 2,088 298
 Chrysler Corp. 8,332 9,692 1,360
 Greyhound Lines, Inc. 928 1,070 142
 Inland Steel Co. 1,686 1,844 157
 United Technologies Corp. 1,446 1,616 171
 Unisys Corp. 2,748 3,055 307
 TOTALS (in millions): $89,703 $127,752 $38,049
 TOP 50 COMPANIES WITH THE LARGEST UNFUNDED PENSION LIABILITY
 (CONTINUED)
 Vested Guaranteed Unfunded Guaranteed
 Funding Benefit Guaranteed Funding
 Company Name Ratio Liability Benefit Ratio
 Ravenswood Aluminum Corp. 11 pct. $ 100 $ 89 11 pct.
 LTV Corp. 38 3,206 1,933 40
 New Valley Corp. 39 663 394 41
 Tenneco Inc. 44 422 227 46
 Keystone Consolidated
 Industries, Inc. 44 204 109 47
 Loews Corp. 48 312 153 51
 Uniroyal Goodrich Tire Co. 51 967 450 53
 Laclede Steel Co. 53 211 96 55
 Rockwell International
 Corp. 55 806 344 57
 Trans World Airlines, Inc. 55 1,018 426 58
 Bridgestone-Firestone, Inc. 55 520 217 58
 Anchor Glass Co. 57 282 111 60
 ACF Industries, Inc. 58 203 79 61
 Bethlehem Steel Corp. 58 5,564 2,138 62
 PacifiCorp. 64 699 226 68
 White Consolidated
 Industries, Inc. 65 369 116 68
 Clark Equipment Co. 65 262 82 69
 Maxxam Inc. 66 844 257 69
 General Motors Corp. 66 56,766 17,195 70
 American National Can Co. 67 1,555 464 70
 Budd Co. 68 508 146 71
 Mack Trucks, Inc. 69 554 153 72
 Allegheny Ludlum Corp. 69 442 120 73
 Rohr, Inc. 70 468 121 74
 Crown Cork & Seal Co., Inc. 71 1,120 280 75
 Goodrich (B.F.) Co. 72 510 124 76
 James River Corp. of
 Virginia 72 351 85 76
 Bull HN Information
 Systems, Inc. 72 459 109 76
 Armco Steel Company, L.P. 68 915 206 77
 National Intergroup, Inc. 74 683 151 78
 CSX Corp. 75 1,026 214 79
 Westinghouse Electric Corp. 76 4,930 1,012 79
 Reynolds Metals Co. 76 1,185 242 80
 PPG Industries, Inc. 77 1,143 219 81
 Goodyear Tire & Rubber Co. 79 1,541 265 83
 Navistar International
 Corp. 79 2,483 413 83
 Northwest Airlines, Inc. 80 1,447 235 84
 Woolworth Corp. 82 649 103 84
 Allied Signal Inc. 82 703 96 86
 Ceridian Corp. 82 651 86 87
 National Steel Corp. 83 1,099 137 88
 Deere & Co. 85 1,536 169 89
 Warner-Lambert Co. 85 1,148 122 89
 Honeywell Inc. 85 2,404 242 90
 Armco Inc. 86 1,983 193 90
 Chrysler Corp. 86 9,208 876 90
 Greyhound Lines, Inc. 87 1,016 88 91
 Inland Steel Co. 91 1,797 110 94
 United Technologies Corp. 89 1,536 90 94
 Unisys Corp. 90 2,902 155 95
 TOTALS (in millions): 70 pct. $121,369 $31,667 74 pct.
 Underfunding in pension plans guaranteed by PBGC is a measure of exposure for the pension insurance program. Experience has indicated that the PBGC's losses at plan termination often exceed estimates made using the Top 50 methodology. In addition, detailed information about a plan allows more refined valuation methods to be used, which often produces higher liability estimates.
 This list does not include potential recoveries by the PBGC upon termination. The list implies no rating or statement of financial condition of the companies. It excludes, whenever identified by the PBGC, plans sponsored outside the United States and domestic non- qualified plans. Liabilities have been adjusted to the interest rate and mortality table assumptions that would have been used to purchase an annuity at the end of 1992. Using the GAM-83 mortality table the implicit rate was 6.40 percent. Comparable rates for last year were 7.37 percent using the GAM-83 mortality table and 6.25 percent using the UP-84 mortality table. Total may not add due to rounding.
 Sources: Standard & Poor's Compustat Services, Inc., database of 1992 annual report data, 1992 PBGC Premium Payment files and information provided by contacted companies. While all companies were given a chance to review the information, seven of the companies listed did not respond. Unless companies provided different information, guaranteed benefits were calculated as 95 percent of vested benefits.
 -0- 11/22/93
 /CONTACT: Judith E. Bekelman, director, communications and public affairs, or Andy Gasparich, public affairs officer, both of the Pension Benefit Guaranty Corporation, 202-778-8840/


CO: Pension Benefit Guaranty Corporation ST: District of Columbia IN: FIN INS SU:

DC-KD -- DC001 -- 6752 11/22/93 10:35 EST
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