GLOBAL - Telecommunications company Alcatel-Lucent has reported an overall surplus in the funded status of its pension schemes of €2.997bn in its third quarter results.

The firm, which has pension plans in the US as well as the UK, Germany, Netherlands, France and Belgium, revealed the fair value of its pension plan assets had increased over the quarter to €25.31bn from €24.97bn in June.

Figures showed the aggregate benefit obligations of the firm's pension funds were valued at €19.9bn, leaving a surplus of €5.4bn, however a deficit of €2.4bn for other post-retirement benefits produced an overall surplus of almost €3bn.

The results claimed the increase in surplus, from €2.848bn in June 2008, "reflects a favourable currency translation impact on the funded status of US plans", as it admitted the funded status of the European schemes "decreased slightly".

Figures showed over the nine months the value of the European pension schemes was adjusted to account for actuarial losses of €311m related to lower actual investment returns, although the schemes benefited from an actuarial gain of €31m as liabilities decreased following the implementation of updated discount rates.

The report claimed the fall in the average expected rates of return on pension and post-retirement assets was "mainly due to the more conservative asset allocation at the end of 2007" as the group reduced the exposure of its defined benefit (DB) pension plans to the equity markets in November 2007.

Despite this, the report confirmed the pension funds are invested in "many different asset categories" including cash, equities, bonds, real estate and private equity, although it admitted the overall net effect of pension and post-retirement obligations on the balance sheet resulted in an income of €231m over the nine month period, compared to €560m the previous year.

Ben Verwaayen, chief executive of Alcatel-Lucent, said: "We are in good shape from a cash standpoint. We achieved a positive cash flow from operating activities this quarter through the reduction of our operating working capital requirements. The funded status of our pensions and other post retirement benefits remains materially positive with a prudent asset allocation."

Tthe €547m pension fund of Dutch firm Lucent Technologies confirmed in April 2008 it would be changing its name following the merger of Alcatel and Lucent in 2006, with members agreeing to transfer to the re-branded --{12253830310595}--> Stichting Alcatel Lucent Pensioenfonds. (See earlier IPE article: Lucent pension fund gets name change)