Kraft Foods Inc., Northfield, Ill., will continue to use a 9% long-term return assumption for its U.S. defined benefit plans but will drop its discount rate assumption to 6.5% from 7% in 2003, according to the company's fourth-quarter earnings report. Kraft had $6.4 billion in U.S. defined benefit plan assets as of Dec. 31, 2001, the most recent figure available.
Kraft's pension plans are fully funded, and the company does not need to make additional contributions, said Donna Sitkiewicz, spokeswoman. However, the company's earnings report said higher benefit costs caused by lower market returns on pension assets in 2002 are expected to affect the company's earnings in 2003 by 7 cents per share, or three percentage points of growth.
