I'm a frequent and satisfied reader of pionline.com and I've attended your well-planned conferences. I was even mentioned in your April 17, 2006, edition.
So I'm disappointed with your recent “The Best Funded Corporate Pension Funds: 2015” because of an underlying inaccuracy. It ranked Alcatel-Lucent eighth with a funding ratio of 105.8%. But Alcatel-Lucent's SEC 20F filing in January showed one plan with $20.1 billion in assets was 95.7% funded and another plan with $11.1 billion in asses was 139.6% funded. Your summary adds the two together even though there is no transferability of assets or obligations from one to the other.
The Financial Accounting Standards Board is specific about keeping these separate: A company is not permitted to offset one plan's net benefit assets with another plan's net benefit liabilities. Further, all overfunded plans will be aggregated and recorded as a net benefit asset and all unfunded or underfunded plans will be aggregated and recorded as a net benefit liability. Therefore, a company may have both a net benefit asset and a net benefit liability reported on its balance sheet.
To set the record straight, you should reissue these rankings. Adding the FASB-specified assets and liabilities on each slide, or deleting pension plan rankings altogether in which an underlying pension plan is underfunded.
As of now, your readership is not well served by the “creative accounting” in your top 10.
Indian River Shores, Fla.
EDITOR'S NOTE: On a companywide basis, Lucent reported $31.2 billion in U.S. defined benefit assets and $29.5 billion in liabilities as of Dec. 31, 2014. That translates to a funding ratio of 105.8%.
Mr. Zydney is a retired AT&T Inc. director of network planning and an active member of the Lucent Retirees Organization Inc., Chatham, N.J.