According to an Associated Press report, that revelation came from Yum! Brands Inc., parent company of the Kentucky Fried Chicken, Pizza Hut and Taco Bell chains, in a US Securities and Exchange Commission filing.
The company blamed the pension shortfall on interest-rate declines and the weak stock market, the AP reported.
Yum! said it doesn’t believe the pension plan underfunding will hurt its financial position, but will likely record a charge to shareholders’ equity as result, the AP report said.
In its 2001 annual report, the company said its pension plan had projected benefit payments of $420 million with a fair value of plan assets at $291 million as of 2001.
Yum! has a lot of company among corporations struggling with underfunded pensions. One particularly hard hit sector: the US auto industry.