3M Reveals Upcoming $1B Pension Charge

October 21, 2002 (PLANSPONSOR.com) - 3M Co. joined a growing list of major US corporations with significant underfunded pension problems with word it would take a $1 billion fourth quarter charge against shareholder's equity to cover its pension expenses

According to a Reuters news report, 3M, which manufactures a variety of products such as Scotch tape and Post-It notes, said it had already pumped $789 million to its US.pension funds from its stronger-than-expected cash flow.

It was not required under pension laws to make a cash contribution, according to Reuters.

3M said it feels it is generating enough cash from its businesses that it will be able to cover the pension contribution without any problem, according to Reuters.

“They are generating huge amounts of cash and they’re trying to act fairly conservatively and prudently,” Morgan Stanley analyst Robert Ottenstein, told Reuters “Looks to me like they’re doing all the right things.”

3M Co. reported quarterly earnings rose 38%, driven by cost-cutting and strong sales in Asia, according to Reuters.

A score of US companies have been hard hit in recent months with significant pension shortages.