
Table: Funded status of the largest DB plans
Unfunded pension liabilities continued to decline in 2004 because of improved investment returns and slightly increased contributions, but at a slower pace than in 2003, according to Pensions & Investments' review of annual reports.
The unfunded liabilities of the largest 100 corporate defined benefit plans fell 21.9% in 2004 from the previous year. In 2003, liabilities had fallen 41% from 2002.
In dollar terms, the top 100 plans were underfunded by $69.5 billion, down from $89 billion in 2003 and $151 billion in 2002.
Employer contributions dropped 27.7% to $37.3 billion in 2004, from $51.6 billion the previous year.
However, in 2003, a full 36% of the total contributions came from General Motors Corp., New York, which had contributed $18.6 billion to its severely underfunded plan.
Without General Motors' contribution, the other 99 corporations on the 2003 list contributed $33 billion to their plans. In 2004, General Motors reported a funding surplus, with an asset-to-liability ratio of 101.7%.
The largest contribution in 2004 came from Boeing Co., Chicago, with $3.6 billion. The contribution, together with an actual return on plan assets of $4.3 billion, helped Boeing reduce its underfunded status dramatically. In 2004, Boeing reported a $3.8 billion shortfall, with an asset-to-liability ratio of 91.1%. In 2003, Boeing had a shortfall of $6.7 billion and a ratio of 83.2%.
Boeing plans to contribute $1 billion to its pension funds in 2005, with $455 million already contributed in the first quarter and an additional $545 million expected later in the year, according to a filing with the SEC (P&I Daily, April 27).
Other plans among the largest 100 that contributed more than $1 billion to their plans in 2004 were: Ford Motor Co., Detroit, $2.3 billion; Deere & Co., Moline, Ill., $1.55 billion; Bank of America, Charlotte, N.C., $1.45 billion; Chevron Corp., San Ramon, Calif., $1.33 billion; United Parcel Service, Atlanta, $1.2 billion; JPMorgan Chase & Co., New York, $1.1 billion; United Technologies Corp., Hartford, Conn., $1.02 billion; and DaimlerChrysler Corp., Auburn Hills, Mich., and SBC Communications Inc., San Antonio, $1 billion each.
Expected contributions for 2005 total about $18.7 billion.
Firms that have already contributed large amounts in 2005 include: International Business Machines Corp., White Plains, N.Y. with $1.7 billion contributed in the first quarter, according to the company's 8-K filing (P&I Daily, April 15); Ford Motor Co., which had contributed $2.4 billion to its plan as of April 30 and will contribute an additional $400 million later this year, according to a 10-Q filing (P&I Daily, May 17); and Verizon Communications Corp., New York, which contributed $698 million to its qualified plans in the first quarter and expects to contribute a total of $730 million for the year, according to a 10-Q filing (P&I Daily, May 9).