Administration February 11, 2003

Ford to Keep Pension Return Assumptions Despite Major Shortfall

November 14, 2002 (PLANSPONSOR.com) - Ford Motor Co. will pump $1 billion over two years into its pension fund to help deal with an underfunding problem that is expected to reach $6.2 billion by year end 2002, the company said.
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Even so, according to a Dow Jones news report, Ford officials say they aren’t touching their assumed return rate on their pension assets – now at an annual 9.5% – until the end of the year. At that point, the company has scenarios calling for a 20% 2003 return, a 9% annual return, and one coming in at 8%.

Over 30 years, the company said it has earned an average of 9.3% on its pension assets, according to the report.

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As of September 30, Ford had a $25.7-billion cash balance, which the company said would allow it to meet projected obligations, Dow Jones said.

Ford’s pension covers about 300,000 retired and active workers.

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