Companies Pour $46 Billion Into Pensions in 2002

April 16, 2003 ( - Approximately $46 billion was poured into defined benefit pension plans by S&P 500 companies in 2002, a threefold increase from 2001's levels.

The contributions made in 2002 represented about 6% of the total cash flow from operations of companies in the S&P 500.   “These are significantly larger contributions that we had estimated,” said David Zion, the Credit Suisse First Boston Corp accounting analyst who wrote the study, according to a Dow Jones report.

Zion’s analysis reported the plans in aggregate were underfunded by $216 billion at the end of 2002, the first time since 1993 that the whole group reported an underfunding.   Of those, 31 reported being underfunded by more than 25% of their market capitalization as of April 9.

However, the total underfunding ended up less than CSFB had forecast, due in large part to organizations exceeding CSFB’s predictions of voluntary contributions.   “We had estimated required contributions of only $10 billion; instead, companies poured almost $46 billion into their pension plans,” Zion wrote.