Northrop Grumman Corp., Los Angeles, today reported its defined benefit pension plans returned -6% in 2008, compared to the long-term estimated rate of return of 8.5%.
Company officials said in a quarterly report that adverse capital market conditions were the cause of the negative returns. Northrop Grumman had warned in a quarterly SEC filing in October that returns for the companys defined benefit plans had been significantly impacted in 2008 by the overall lower fair-market value that has been experienced so far that year and the plans fair-market value could drop by the end of 2008.
Northrop Grummans defined benefit plans had $19.7 billion in assets as of Sept. 30, down 15% from the previous year, according to Pensions & Investments survey data.
Separately, the company made discretionary contributions of $200 million each year to its pension plans in 2007 and 2008. The company contributed a total of $342 million in 2007. It also contributed $86 million to its defined benefit plans in the third quarter of 2008.