Several companies announced contributions to their defined benefit plans in recent filings with the Securities and Exchange Commission.
• Delphi Corp., Troy, Mich., will contribute about $1.3 billion to its U.S. pension plan after emerging from Chapter 11 bankruptcy protection later this year, according to an SEC filing. Delphi’s U.S. pension plan had $10.7 billion on Dec. 31, according to the firm’s 2006 annual report.
Recent discussions with the Internal Revenue Service and the Pension Benefit Guaranty Corp. “have culminated in a funding plan that would enable the company to satisfy its pension funding obligations upon emergence from Chapter 11 through a combination of cash contributions and a transfer of certain unfunded liabilities to a pension plan sponsored by General Motors,” according to the filing. The IRS will waive funding requirements for Delphi’s pension plan for the year ended Sept. 30, 2006, provided that Delphi files a reorganization no later than July 31, emerges from bankruptcy protection no later than Nov. 15, moves $1.5 billion of pension liabilities to GM and contributes about $1.3 billion to its pension plan through June 15, 2008.
Delphi filed for Chapter 11 bankruptcy protection on Oct. 8, 2005.
• Verizon Communications Inc., New York, contributed $500 million to its $41.5 billion pension plan, according to an 8-K filing. Plan officials anticipate making qualified pension trust contributions totaling $510 million in 2007 and $300 million in 2008, according to the company’s annual report.
• Olin Corp., Clayton, Mo., will contribute $100 million to its pension plan in the second quarter, according to its first-quarter earnings statement. Plan assets totaled $1.416 billion as of Dec. 31, according to the company’s 2006 annual report.
John E. Fischer, vice president and chief financial officer, said during the firm’s April 27 earnings conference call that “investment policies of the plan will be adjusted to insulate the plan from future discount-rate risks.” He added that reductions in the discount rate since 2001 have increased the company’s pension liability by about $200 million. “Based on the combination of the intended contribution and the investment policy change, we believe it is likely that we will be able to meet the full funding requirement of the 2006 Pension Protection Act without additional contributions,” he said.
Larry Kromidas, Olin’s assistant treasurer and director of investor relations, said he was unable to provide more information about changes to pension investments, citing SEC Reg FD restrictions.
