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To: chic_hearne who wrote (72686)	2/27/2001 9:02:17 PM
From: KyrosL	Read Replies (2) \| Respond to of 436258

Chic, IBM's pension plan is in very good shape. In fact it's overfunded at present -- in other words IBM does not have to contribute to it, because the plan has more than enough money to fulfill its obligations to current retirees. My hunch is that it's fairly conservatively invested, but I don't really know. The recent changeover from defined benefits to cash balance helps reduce IBM's future contributions to the plan and is also good for people that don't intend to spend their lives working at IBM. Note that any investment gains in the pension plan over and above the level required to fund current obligations are being reported as income in IBM's income statement -- one of Earlie's complaints about IBM's financial reporting. But everybody is doing it, and some (GE comes to mind) are actually a lot worse than IBM.

To: chic_hearne who wrote (72686)	2/28/2001 7:08:14 AM
From: Earlie	Read Replies (1) \| Respond to of 436258

Chic: I don't mean to dodge your question, but the nastiest battle I experienced in the last several years was with some of the IBM folk who took exception to my analysis of their accounting. I'm getting too old for those kinds of fights these days. I do think you would find it interesting to explore how Louis has treated the pension fund gains over the last while. Also enquire as to the impact on the pension fund of recent stock market "corrections". Do the managers of the pension fund see any actuarial need to increase contributions over the next few years? Best, Earlie