US – Computer firm International Business Machines Corp. says it has made a 3.95 billion dollar (3.78 billion euro) contribution in cash and shares to its 62.5 billion dollar US pension fund – more than it had expected, due to falling markets.
“The contribution totals approximately 3.95 billion dollars, 2.09 billion dollars or 52.9% in cash with the remaining 1.86 billion dollars or 47.1% funded with 24,037,354 shares of IBM stock,” the company said in a statement.
IBM said on December 4 that it intended to fully fund the plan by year-end. The contribution was more than the three billion dollars it had previously estimated “due to the performance of capital markets, which decreased the value of the pension plan's assets in the intervening weeks”.
"Our free cash flow and our balance sheet are strong enough for us to fully fund the U.S. pension plan," said chief financial officer John Joyce.
On December 4, Joyce said: “Although we are not required to fund the U.S. pension plan at this time, we want to deal with the pension gap now. We believe that funding the pension plan achieves the right balance among the interests and needs of IBM employees, retirees and shareholders."
The company said it has not contributed to the US pension plan since 1995 and that any contribution to the plan would not affect operating budgets or “strategic initiatives”. IBM did not expect the added pension funding to hit earnings per share expectations.