Several companies disclosed information about their pension funds in filings with the Securities and Exchange Commission recently:
• Ford Motor Corp., Dearborn, Mich., plans to make a voluntary contribution of $2.8 billion to its pension plans in 2005, according to the company's 10-K filing. It contributed $2.2 billion in 2004 and $2.8 billion in 2003. As of Dec. 31, Ford's U.S. defined benefit plans totaled $39.6 billion. Non-U.S. retirement plans totaled $20.6 billion, according to the filing. The company does not expect any variable-rate premiums for its major defined benefit plans to the Pension Benefit Guaranty Corp. this year. Ford's assumed rate of return is 8.75% for U.S. pension plans; 8% for U.K. plans; and an average 7.76% for other non-U.S. plans. The company's annualized 10-year return as of Dec. 31 was 11.2% for U.S. plans and 8.4% for U.K. plans, according to the filing.
• United Parcel Service Inc., Atlanta, plans to contribute about $723 million to its pension plan trusts in 2005, according to the company's annual report. UPS contributed $450 million to its pension plans in 2004 and roughly $1.1 billion in 2003. The company had about $9.9 billion in pension assets as of Sept. 30, according to the report.
• General Motors Corp., Detroit, does not expect to make any contributions to its $91 billion U.S. hourly and salaried plans in 2005, according to documents filed with the SEC. "General Motors does not foresee making contributions to the U.S. pension funds until the end of the decade because the plans are more than $3 billion overfunded as of the end of December 2004," said Jerry Dubrowski, GM spokesman, in an interview.
• Delta Air Lines Inc., Atlanta, this year plans to contribute $275 million to its defined benefit plans and $110 million to its defined contribution plans, according to the carrier's annual report filed with the SEC. Delta officials estimate the company's 2005 pension expense at $440 million, the filing said. The plans have a combined $6.8 billion in assets.
The airline contributed $455 million to its pension plans in 2004. The annual report said the airline paid $251 million in settlement charges in 2004 related to the pilots' pension plan "due to a significant increase in pilot retirements." Delta froze the pilots' pension plan as of Dec. 31 and established a new defined contribution plan for pilots on Jan. 1.
Company officials believe the airline will incur a "substantial net loss in 2005" and that cash flows from operations will not be sufficient to meet all the carrier's liquidity needs for the year, the filing said.
• Continental Airlines Inc., Houston, expects its 2005 pension expense to decrease by about $90 million as a result of freezing the pilots' and flight attendants' defined benefit plans and starting new defined contribution plans, according to the annual report. The company previously said it expected $315 million in non-cash pension expense this year.
Continental officials announced Feb. 28 that the airline reached tentative agreements with its pilots, flight attendants, mechanics and dispatchers for new contracts. Under the tentative pact with its pilots, the airline would freeze the pension plan May 31 and start a new money purchase plan. The flight attendants tentatively agreed to become part of the $6.4 billion International Association of Machinists and Aerospace Workers National Pension Fund, Washington. The unions are slated to vote on ratification of their agreements by the end of March.
The airline will be required to contribute $307 million to its pension plans in 2005 and a total of about $1.56 billion through 2009 based "on current legislation and assumptions," according to the report. Those estimates don't take into account the impending pension changes. The company assumes a 9% long-term rate of return on plan assets.
The airline had total defined benefit assets of $1.3 billion as of Dec. 31, according to the report.
Sarah Anthony, Continental spokeswoman, said the airline is declining to comment on information related to the annual report.
• Hewlett-Packard Co., Palo Alto, Calif., contributed $540 million to its pension plans during the three months ended Jan. 31, according to the company's 10-Q filing for its fiscal 2005 first quarter. Hewlett-Packard plans to contribute an additional $320 million during the remainder of fiscal 2005, the filing said. The firm contributed $564 million to its pension plans in fiscal 2004, according to the company's annual report for the year ended Oct. 31, 2004. At the time, company officials estimated the total fiscal 2005 contribution at $850 million. Hewlett-Packard's U.S. pension plans had roughly $3.2 billion in assets, while its non-U.S. plans had $5.9 billion in assets as of Sept. 30. Don Gentile, spokesman, did not return a call seeking comment by press time.
• Deere & Co., Moline, Ill., expects to contribute $182 million to its pension plans during the remaining three quarters of fiscal 2005, according to the firm's first-quarter report. The company contributed about $8 million to its pension plans during the three months ended Jan. 31. Deere had about $7.6 billion in pension assets as of Oct 31.
• Wyeth, Madison, N.J., plans to contribute $180 million to its $3.9 billion defined benefit plans this year, according to the pharmaceutical company's 2004 annual report. Last year, the company contributed about $273 million.
• ITT Corp., White Plains, N.Y., will contribute $102.4 million to its $5.3 billion pension fund in the first quarter, according to the firm's 10-K filing. ITT officials estimate the company will not have to make additional contributions through 2007. It contributed $120.1 million to the fund in 2004.
• Ingersoll Rand Co. Ltd., Woodcliff Lake, N.J., plans to contribute $22 million to its $2.65 billion in pension plans this year, according to the company's annual report. The company contributed $170.1 million in 2004. It used a 5.75% discount rate to measure U.S. liabilities in 2004, down from 6% in 2003. For non-U.S. plans, the company used 5.25% last year, down from 5.75% in 2003. At the end of 2004, the company's plans were underfunded by $295 million, compared with $442 million at the end of 2003.
• Verizon Communications Inc., Stamford, Conn., expects an increase in pension expense of at least $276 million in 2005, based on an assumed discount rate of 5.75%, according to its annual financial filing. The increase is based on the 2.76 billion in outstanding shares. The company assumed a discount rate of 6.25% in 2004. Verizon reported a pension expense of $960 million in 2004 and pension income of $212 million in 2003, according to the filing. The company had $39.1 billion in pension assets as of Dec. 31.