Xerox: Pension Expense to Jump $150M , Pension Funding by $50M

November 8, 2002 ( - Xerox Corp.'s predicts its 2003 pension expense will jump by $150 million over 2002 and its cash funding requirements to jump by $50 million, the copier giant said in a US Securities and Exchange Commission filing.

The expense increase is tied to a potentially lower discount rate and expected rate of return assumptions, combined with negative asset returns in 2001 and 2002, the company reported according to a Dow Jones news story.

According to the report, the company said it plans to reduce its discount-rate assumption for its major pension plans in response to a decline in corporate bond yields.

It also may reduce its 2003 expected return on plan assets assumption by about 1% as a result of market conditions and its longer-term outlook, the filing said.

Xerox said the exact amount of the pension cost increase depends on the direction of interest rates and pension asset returns for the rest of 2002.

The predicted cash funding increase to $170 million also depends on the direction of the financial markets over the rest of the year, the Stamford, Connecticut company said, according to Dow Jones.