Ford offers lump-sum payouts to salaried retirees

Ford offers lump-sum payouts to salaried retirees

Automotive News | March 9, 2012 – 1:28 pm EST

DETROIT (Reuters) — Ford Motor Co. plans to offer lump-sum payouts as an option for future salaried retirees in the United States as part of its push to decrease the risk presented by its pension obligation.

The move, discussed during an investor presentation today, is one of the tenets of the automaker’s effort to tackle an issue that has hurt its market value and ability to achieve an investment-grade credit rating.

The automaker said it was exploring other options to “de-risk” its pension plans. Ford already said it would pour $3.5 billion cash into its plans and is shifting those assets more heavily toward bonds.

“While we have no plans to freeze or terminate our plans at this time, we monitor and evaluate the competitiveness of our benefits on a periodic basis,” Ford Treasurer Neil Schloss said during a presentation to analysts.

General Motors Co. also announced a lump-sum payment option for its white-collar workers last month and said it was moving its veteran white-collar workers to 401(k) retirement plans to reduce future pension liabilities.

Ford’s global pension plans were underfunded by $15.4 billion at the end of last year. That shortfall, which widens and contracts based on asset returns and interest rates, is typically viewed as debt by investors.

“The volatility of the funded status drives unpredictable variability in our profits, in our cash, and adds non-core financial risk,” Schloss said.

Ford has about 25,000 salaried employees in the United States. Currently Ford has about 195,000 hourly and salaried retirees and surviving spouses.

Share
Seniority Lists
Recent Posts!
Bargaining Committee

Chairman
Mike Herron
President
Tim Stannard
Zone at Large – 1st
Danny Taylor
Zone at Large – 2nd
Mark Wilkerson
Committeepersons
Joe McClure
Chad Poynor
Steve Roberts
Derek Lewis
Bill Cundiff
Kirk Zebbs
Don Numinen
Jay Minella
Danny Bragg
Chris Hill
Rashad Thomas
Keith Oswald
Chris Brown

1853 Officers

President
Tim Stannard
Chairman
Mike Herron
Vice President
Darrell DeJean
Financial Secretary
Mark Wunderlin
Recording Secretary
Peggy Mullins
Trustee (3)
Jay Lowe
Dave Clements
Dave Spare
Sgt. at Arms
David C Spare
Guide
Ashley Holloway
E-Board at Large (2)
David Ryder
Steve Roberts
GM Unit Chair
Mike Herron
Leadec Unit Chair
Larry Poole
Ryder Unit Chair
Patrick Linck
AFV Unit Chair
Neil Osborne
Retiree Chair
Mike Martinez

Get Text Alerts



asdasdsd

*Standard text messaging rates may apply from your carrier