Following is my analysis of the funding status of IBM's employee pension plans:
On page 22 of the 2001 IBM annual report, in the section
labeled "change in plan assets", there is a line labeled "actual
return on plan assets" showing $2,405 Million loss in the US plan and
$1,559 Million loss in non-US plans, for a total 2001 actual
(recognized) loss of $3,964 Million. Subtracting this recognized
loss along with benefits paid yields a "Fair value of plan assets at
end of year" (2001) just slightly over "Benefit obligation at end of
year" ($686 Million overfunded US + non-US total), so the pension
plan is NO LONGER SIGNIFICANTLY OVERFUNDED! (It was "overfunded" by $10.7 Billion (US + non-US) at the end of 2000.)
My real concern is the line immediately following, labeled "Unrecognized net actuarial losses/(gains)" which shows an unrecognized LOSS in the US plan of $4,297 Million, and non-US plans of $2.871 Million, for a US + non-US total of $7,168 Million "unrecognized loss".
If (when) this "unrecognized loss" is "recognized", the US + non-US pension plans are UNDERFUNDED by 6.482 BILLION DOLLARS at the end of 2001!!!
The source of this data is:
Do you agree with this analysis, or am I reading this all wrong???
THEIR DEFINED BENEFIT PLANS HAVE GONE FROM
BEING $17 BILLION OVERFUNDED AT 12/31/1999
TO $0.6 BILLION OVERFUNDED AT 12/31/2001!!
THEY ARE UNDOUBTEDLY UNDERFUNDED BY BILLIONS
IBM's pension plans have invested heavily
in the most scandalous industries such
as telecommunications and energy!! In doing
so, they have helped the investment banking
cartel become the fraudulent operations that
they are, have aided and abetted Wall Street
in becoming the scam it is!
They have also engaged in massive layoffs
enabling them to reduce future pensions and
reduce the discounted present value liability
of future pensions. The layoffs eliminate
future salary increases (on which final
pensions are based), reduces total year's of
service (on which final pensions are based),
halts vesting (on which final pensions are
based), and eliminates funding for the latter
year's of service which are the most costly.
While raping the common employee, IBM
management rakes in hundreds of millions of
WHERE IS THE TRUTH AND JUSTICE!!!
>>Warren Buffett, the billionaire investor whose every move is closely watched by Wall Street, fired off another salvo on Wednesday in his crusade to get corporations to expense stock options, an issue gathering steam in the wake of recent accounting scandals. In an op-ed piece in the New York Times, Buffett, the chief executive of diversified holding company Berkshire Hathaway (nyse: BRKa - news - people ), said the most "flagrant deceptions" have occurred in the world of stock options and pension accounting. The misrepresentations in those areas "dwarfs the lies of Enron and WorldCom," he wrote.<<
Whose most "flagrant deceptions" in the world
of pension accounting do you suppose he had in
mind? Dwarfs the lies of Enron and WorldCom??
Oh the liability!! Will there be any accounting
What do you mean they "ducked" questions regarding expensing stock options and assumptions on pension returns on the analysts call "this morning"? referring to your note that is linked below. (Better presentation on what was in the "papers" verses your opinion.) Very good improvement - more transparent!
in 2001 even though they did not disclose to
the public that IBM'S defined benefit plans
were badly underperforming.
The plans' ACTUAL results were $10.228 billion
LESS than the ASSUMED results IBM showed in its
profits!! They ASSUMED they would earn and
booked a profit of $6.624 billion for 2001.
Their ACTUAL loss was $3.964 billion!
Insiders knew what had happened even as they
Want to talk about a P/E ratio? Use an actual
earnings figure for 2001. Income as reported
was about $11 billion before taxes. Take
$10.228 billion and taxes off of that figure
and you are left with $500 million or 30 cents
What did Warren Buffett say??
I wish my boy would stop working himself into a tizzy since he gots fired.
He ain't been right in the head ever since.
He just mumbles alot. He keep sayin i'm gonna get yous sucka, everyday.
The opening SUMMARY of Statement of Financial
Accounting Standards No.87, Employers
Accounting for Pensions in explaining how
recognition of some items is delayed in the
statement of financial position states among
"The delayed recognition included in this
Statement results in excluding the most
current and most relevant information from
the statement of financial position. That
information, however, is included in the
The required disclosures referred to are
footnotes that will spell out in detail
the significant factors of the pension plan
INCLUDING RETURN ON PLAN ASSETS! THERE IS
NO EXCEPTION ALLOWING THIS INFORMATION, "THE
MOST CURRENT AND MOST RELEVANT", TO BE
EXCLUDED FROM FOOTNOTES IN QUARTERLY REPORTS!!
THE RULE OF CORPORATE LAW AND SECURITY LAW
ALSO REQUIRES FULL DISCLOSURE OF ALL MATERIAL
INFORMATION TO SHAREHOLDERS AND POTENTIAL
WHY HASN'T IBM DISCLOSED THIS INFORMATION???
IBM IS CRIMINAL!!!
From 7/19/02 New York Times:
/Another good move for the S.E.C. would be to
/force companies to disclose important
/information more often. More and more
/investors now understand that the failure to
/treat the value of options as an expense is
/deceptive. And they realize that optimistic
/assumptions on pensions have allowed
/companies to manufacture dubious profits. But
/disclosures on those issues are only in
/annual reports, and companies are not eager
/to change that. ( I.B.M. ducked questions on
/both issues in its conference call this
/week.) Such numbers should be in every
/quarterly earnings report.
IBM DUCKED QUESTIONS ABOUT ITS CROOKED
General corporate laws, security laws and GAAP
require FULL DISCLOSURE OF ALL MATERIAL
FACTS to stockholders and potential
GAAP DOES NOT ALLOW MISLEADING FINANCIAL
IBM FIDUCIARIES ARE LIABLE!!
GM has already included extensive pension
information for the first six months of this
year in a FORM 8-K filed with the SEC a few
days ago. WHY HAVEN'T IBM AND GE DONE
Form 10-Q is due by Wenesday.
Follow the link at the bottom of this message
or search on truthdisclosurecanon as author to
learn more about IBM's fraudulent accounting.
There is no question companies have lost money in their pension plans....just like employees have lost money in their 401ks. If there ever was a reason for the govt to want the economy to improve it is this fact alone. The govt will do whatever it takes to bolster investor confidence. Absent an improvement in business the govt is on the hook. THIS IS VERY BULLISH FOR EQUITIES. Keep posting your crap!
Here is an interesting link:
Date: Thu Aug 8, 2002 12:57 am
Subject: Re: Does anybody know what pension funds are invested in?
--- In ibmpension@y..., justa_bean_counter <no_reply@y...> wrote:
> --- In ibmpension@y..., funreal <no_reply@y...> wrote:
> > Care to share the totals?
> Form 13F
> Date ... Fair Mkt Value (000) ... SHARES OR PRINCIPAL AMOUNT
> 1999 1Q ... 9,783,393 ... 216,578,456
> 1999 2Q ... 10,081,613 ... 194,907,570
> 1999 3Q ... 9,128,550 ... 195,033,498
> 1999 4Q ... 10,014,307 ... 192,455,790
> 2000 1Q ... 10,464,341 ... 198,934,876
> 2000 2Q ... 10,378,719 ... 215,022,019
> 2000 3Q (N/A, spreadsheet bombed)
> 2000 4Q ... 9,786,905 ... 232,641,624
> 2001 1Q ... 9,059,943 ... 247,318,084
> 2001 2Q ... 9,831,353 ... 259,477,616
> 2001 3Q ... 8,472,149 ... 267,526,202
> 2001 4Q ... 8,820,969 ... 255,674,091
> 2002 1Q ... 8,838,696 ... 250,086,231
> 2002 2Q ... 7,536,723 ... 248,328,464
> So what are we looking at?
We is looking at the figures backwards. 2002 2Q represents
248,328,464 shares worth $7,536,723,000. IBM, for example,
is shown as 1,369,671 shares times June 28 closing price of $72
or $98,616,(000). We are looking at only a small part of the equity
Note that the 6/30/2002 total figure of $7.536723 billion is
85.443 percent of the 12/31,2001 figure of $8.820969 billion.
This might represent a 15% loss on investments. Could be less,
could be more. We don't know how funds were shifted among
investments and what funds were used to make payments to
At 12/31/98 per their form 5500, IBM had $25.117 billion in common
stock, $2.291 billion in partnerships/joint ventures, $1.374
billion in common/collective trusts, $0.662 billion with
registered investment companies, and $0.484 billion of employer
related securities. These total about $30 billion out of their
total assets of about $45 billion at 12/31/1998.