R.J. Reynolds Tobacco Holdings Inc., Winston-Salem, N.C., expects this years pension expense to be $90 million, compared with $39 million in 2002. The company, whose pension liabilities surpassed its pension assets by $933 million as of Dec. 31, reported that its pension assets dropped by $245 million. The company, in its annual financial report, said it also lowered the expected rate of return on pension assets to 9% from 9.5%. Reynolds also blamed declining corporate bond yields and declining interest rates for adversely affecting its pension expense in 2003.
Reynolds defined benefit plan had $2.13 billion in assets as of June 2002, according to Money Market Directory.