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S&P wants companies to detail slide in pension fund assets

By Martha Graybow

NEW YORK, July 29 (Reuters) - Ratings agency Standard & Poor's on Monday asked U.S. companies to provide up-to-date information about the value of their pension plans, in an effort to assess the fall-out from the stock slide on retirement funds.

Corporate pension plans have lost money on their investments and some have become underfunded by billions of dollars, which could hurt companies' bottom lines if market conditions do not improve and they are forced to come up with the cash to deal with the shortfall. Automakers General Motors Corp. and Ford Motor Co. are among the companies facing rising pension costs.

S&P, in a news release, said it wants corporations that offer defined benefit pension plans to provide information on the value of their plan assets as of June 30 -- rather than waiting for year-end financial disclosures. The ratings agency also wants to know the mix of assets in these plans, which S&P said will help determine which companies may be hit the hardest if the stock slide doesn't let up.

The request will apply to about 720 companies S&P tracks, the ratings agency said.

"We're concerned that given recent weakness in the stock market, that those companies that are sponsors of defined benefit pension plans could be facing higher than necessary cash contributions over the next few years," Scott Sprinzen, a managing director of corporate and government ratings at S&P, told Reuters.

"Ordinarily, information about the pension funding position is only disclosed at the end of the fiscal year, (but) right now, that information isn't very adequate to determine just where things stand presently," he said.

Defined benefit pension plans pay a fixed amount of money per month upon retirement. Over the past couple decades, many of these plans have been replaced with defined contribution plans like the 401(k), in which the employee -- sometimes together with the employer -- puts in money and the amount paid out at retirement depends on how the investments perform.

Last week, the Pension Benefit Guaranty Corp., a federal corporation that insures private-sector defined benefit pension plans, said these plans were underfunded by about $111 billion at year-end 2001, up from $26 billion a year earlier. The PBGC data is based on annual filings from companies that have $50 million or more in underfunding.

Pension Benefit Guaranty provided the data to the staff of Congressman George Miller of California, a Democrat and member of the House Education and the Workforce Committee.

"The implications of such massive shortfalls in pension funds are staggering, for pensioners, taxpayers and for the private companies themselves," Miller wrote in a letter last week to Treasury Secretary Paul O'Neill and Labor Secretary Elaine Chao. The letter was posted on the congressman's Web site.