IBM Adds $500 Million In Company Stock to Pension

December 26, 2002 (PLANSPONSOR.com) - International Business Machines (IBM) Corp. set aside $500 million more in company stock for its US retirement plan, raising the total stock value in the plan to $2 billion.

IBM filed with the US Securities and Exchange Commission to register six million common shares, and now has 25 million shares earmarked to pay pension liabilities, according to a Bloomberg news story.

The world’s largest seller of computers and related services has promised to detail its pension obligations at the end of the year, including how much will be paid in stock and cash, Bloomberg said.

Stock market declines in the past two years have lowered returns that retirement plans are getting from assets, forcing corporate sponsors – such as IBM, Ford Motor Co. and Boeing Co. – to increase money committed to cover future pension liabilities.

IBM joins other US corporations in committing company stock to that effort.

Honeywell International got the OK in November from its board to pour $900 million more in cash and stock into its pension plan. The company said a “substantial portion” would be in company stock. (See  Honeywell Gains Authorization For Additional Pension Funding ).  

Navistar International Corp. said in an October regulatory filing that it, too, wanted to fill some of its pension shortfall with company stock. (See  Navistar Considers Putting Stock In its Pension ).

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