WASHINGTON — The SEC asked several companies to provide information related to their pension accounting practices. At press time, six companies — Delphi Corp., General Motors Corp., Ford Motor Co., Northwest Airlines Corp., Navistar International Corp. and Boeing Co. — had publicly acknowledged receiving such requests.
"Those ... are the six (companies) that we have started with, but that's not to say that there aren't more companies that will be contacted," said Ken Lench, an assistant director in the SEC's division of enforcement. He would not provide additional information.
Delphi, Troy, Mich., assumed a 9% rate of return on its $7.44 billion pension fund as of Dec. 31. "Given the preliminary nature of this matter, we are not able to predict the potential effect, if any, this investigation will have on Delphi," according to a company filing with the Securities and Exchange Commission.
At the end of 2003, Detroit-based GM assumed a 9% rate of return on its $18.1 billion in pension assets. "We're confident that GM's financial reporting in this very complex area is complete," said Toni Simonetti, GM spokeswoman.
Ford, Dearborn, Mich., assumed an 8.8% rate of return on $37 billion in plan assets as of Dec. 31. Glenn Ray, Ford spokesman, said the SEC is seeking information on dating back to Jan. 1, 2000. "We obviously meet the highest standards for accounting," he said. "Obviously we will cooperate fully with the agency."
Northwest, Eagan, Minn., assumes a 9.5% rate of return on investments in its $4.81 billion in pension plans, which is "lower than the 11.7% average return that our plans have experienced since 1995," said Bernie Han, executive vice president and chief financial officer, in an Oct. 20 conference call. The SEC "absolutely" has not charged Northwest with any wrongdoing, Mr. Han said, noting that the carrier is "fully cooperating" with the agency's request.
Boeing, Chicago, began assuming an 8.75% rate of return on its $33.2 billion in pension plan assets as of Sept. 30, 2003. The company's Oct. 21 SEC filing said it is cooperating with the inquiry, and the firm's "accounting policies and practices are in accordance with the highest standards and are accurate and complete."
As of Oct. 31, 2003, Navistar, Warrenville, Ill., assumed a 9% rate of return on assets in its $3 billion pension plan. Navistar said in an SEC filing that it intends to "fully cooperate with this request."