Ameritech's $12.5 billion defined benefit pension fund will use normal cash flow to pay benefits related to the company's plans to eliminate 6,000 non-management positions.
No assets will be liquidated, said Ralph J. Egizi, director of investment operations.
Company officials also aren't worried about a big hit on Ameritech stock if many departing employees cash out their defined contribution accounts. If need be, Ameritech will control the release of company stock into the markets, Mr. Egizi said. Besides, he said, terminating employees often leave their assets in Ameritech's plans.
Some 37% of the $3.3 billion in defined contribution assets was in company stock as of Sept. 30.
Under Ameritech's plan to eliminate the union jobs, workers will be eligible to take lump-sum distributions from both the defined benefit and the defined contribution plans.
"The work force reductions will be gradual, remember, not all in one fell swoop, so we will be able to direct cash flow where it's needed.
"This event will not cause us to change the investment strategy of the defined benefit plan," Mr. Egizi said.
"We have been monitoring cash flows all along as we planned for this event, and will continue to do so.
"We anticipate that normal cash flow into the fund will easily handle the payouts."
Predicting how many employees will accept the offer of early retirement or a sweetened severance package is hard to predict, said Mr. Egizi.
"We obviously don't have any real idea of the numbers yet and therefore can't know exactly now what our assets and liabilities will be at the end of 1995. We will keep up the continuous monitoring."
Meanwhile, he said, Ameritech's defined benefit plan "is well-funded and will still be well-funded even after any disbursements from the work force reduction plan."
Agreements between Ameritech and its two primary unions - the Communications Workers of America and the International Brotherhood of Electrical Workers - include such pension enhancements as a three-year credit to the age and net credited service of eligible employees who retire by mid-1995.
About 7,000 Ameritech workers are eligible for retirement now; more than 6,000 others will be made eligible under the early retirement deal.
About 48,000 of Ameritech's 67,000 employees are non-management.