Raytheon Co., Waltham, Mass., expects to make required contributions of roughly $1.11 billion to its pension plan in 2009, double the required contribution of last year, according to the company’s latest 10-K filing with the SEC.
The company’s annual report said the increase in required contributions expected this year “is primarily due to the impact of the significant decline in the value of our pension plan assets in 2008.”
According to the annual report, Raytheon’s pension plan assets ended 2008 at $10.907 billion, down 26% from the year before. That drop reflected $3.7 billion in market declines.
Raytheon contributed $1.174 billion to its pension plan in 2008, including a required contribution of $514 million, determined by ERISA rules.
As of Dec. 31, Raytheon’s pension assets cover only 67% of its pension obligations, which the company pegged at $16.361 billion, down sharply from 90% at the close of 2007, according to information provided by Raytheon spokesman Jon Kasle.
According to the annual report, equity securities accounted for 37% of Raytheon’s overall pension assets as of Dec. 31, down from 59% the year before. Debt securities accounted for 39%, up from 27%, while cash more than doubled to 18% from 8%. Real estate accounted for 3% of the portfolio, down from 4%, and “other” investments likewise accounted for 3%, up from 2%.
