Just started receiving pension … yahoo. Not a lot but what the heck. Was talking to a current employee, she said that NCR borrowed from the pension fund. This got me thinking and I looked closely at the NCR annual statement (MS in finance ATT GIS paid for). Go to the notes section in the report. It is note eight or nine, right next to the Fox River thing which is bad news.
Anyway, there was a big shift in pension fund holdings from stock to corporate debt in the last year or so. The annual report does not say who’s debt this is. Does anyone know? I used to be able to request a pension annual report or prospectus but have not been able to find one for this or the previous year.
This might be an interesting swap by NCR…borrow from the pension fund, and at least in part, fund the pension fund from the money borrowed from the pension fund. Kind of like real estate sale and lease back.
The concern is whether the assumed rate of return for the pension fund is equal, greater, or less than the rate that NCR borrowed from the fund. If NCR borrowed from the fund at a lesser rate than the assumed fund ROI, it might be an issue. Where is this information available?????
Don’t get me wrong. I am not a basher, only want to know what’s going with my wife’s and my future income. NCR has/had some really great people.
Based on Nuti’s comment that this is something like step two of four and we are not in the pension business, NCR will follow in the steps of GM with a pension risk-transfer deal. So Prudential or Metlife or “goofy insurance company” will assume NCR’s pension liability for a $B or so.
Not a bad idea business plan because the longevity risk is somewhat offset by the insurance company’s death benefit payment risk.
Problem for us retirees is that the PBGC is out of the picture.