Ford Motor Co., Dearborn, Mich., today reported pension underfunding of $7.3 billion for its U.S. pension funds and $14.5 billion worldwide. Ford expects a pre-tax pension expense for this year of $270 million. Ford contributed $500 million to the U.S. pension plan on Jan. 6 and plans to make an early contribution of an additional $500 million for 2004 in the first half of this year. Company officials told analysts today that they do not expect to have to make additional contributions to its two U.S. pension plans until 2007 and do not expect to be subject to PBGC penalty premiums until 2005.
The $29 billion U.S. defined benefit plans return for 2002 was -9.7%, which reduced equity investments by $5.2 billion. On Jan. 1, Ford reduced its long-term pension fund return assumption to 8.75%, from 9.5% for the United States, Canada and the United Kingdom.