-- GE had $5.25 bln loss on pension assets in 2002 --
NEW YORK, March 10 (Reuters) - General Electric Co. <GE.N>
reported a $5.25 billion loss on its pension plan assets for
2002, as stock market declines took a heavy toll on funds
invested on behalf of hundreds of thousands of employees.
In its annual report filed on Friday, GE said its
post-retirement benefit plans contributed $806 million to
pretax earnings in 2002, down 45.5 percent from a year
earlier.
The big pension investment loss is 83 percent higher than
the loss of $2.88 billion reported for 2001, reflecting a weak
global economy and steep drops in U.S. stock indexes.
The Dow Jones Industrial Average <.DJI> fell nearly 17
percent in 2002, its sharpest decline in 25 years, while the
Nasdaq Composite index <.IXIC> ended the year down about 32
percent.
GE's fourth-quarter earnings report, released in January,
showed that its pension fund surplus fell to $5 billion at the
end of 2002 from about $14 billion a year ago. GE Chairman Jeff
Immelt said at the time the surplus could dwindle even more.
"If the stock market performance is relatively flat, we'll
have a couple of billion dollars of surplus at the end of
(2003)," Immelt said on Jan. 17.
GE has estimated that pensions would decrease its net
income by $300 million this year. That's a far cry from
previous years when income from pension plans was a solid
contributor to GE's bottom line. In 2001, for example, pension
income contributed $1.48 billion to pretax earnings.
Fairfield, Connecticut-based GE is one of the world's most
valuable companies. It earned $15.1 billion in 2002.
The conglomerate, whose businesses range from jet engines
to financial services, said it does not plan to make any
contributions to its pension plan in 2003 or in the next five
years, "so long as expected investment returns are achieved."
No contributions to the pension plan have been made since
1987, according to GE's annual report.
The company, whose pension plan covers approximately
508,000 participants, lowered its assumption for long-term
returns on its pension investments to 8.5 percent in 2002 from
9.5 percent in 2001 and 2000.
((Reporting by Greg Cresci, Editing by Leslie Adler; Reuters
Messaging: greg.cresci.reuters.com@reuters.net; 646 223-6125))
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Symbols:
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10-Mar-2003 13:48:57 GMT
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