Ford worldwide pension deficit jumps to $18.7 billion | The Detroit News | detroitnews.com

Ford worldwide pension deficit jumps to $18.7 billion | The Detroit News | detroitnews.com

Ford Motor Co.'s pension deficit widened in 2012 by 21 percent and the Dearborn automaker vowed Tuesday to boost contributions to its under-funded pensions by $5 billion in 2013.
Despite the fact that Ford pumped $3.4 billion into its worldwide pension plans in 2012 — over the $1.1 billion it infused in 2011 — the automaker's pension plans underfunding widened.
Ford said its pensions are now underfunded by $18.7 billion, up from $15.4 billion. Its U.S. plans are underfunded by $9.7 billion, up from $9.4 billion.
Low interest rates means companies must recalculate the "discount rate" in determining pension funding. Ford dropped its discount rate by 0.8 percent, accounting for the pension plan underfunding boost.
"Anyone that has a defined benefit plan is suffering from these record low discount rates," Ford CFO Bob Shanks said in a teleconference with analysts and reporters Tuesday morning. "We do expect discount rates to start to increase as we move forward."
Ford said its pension plans earned 14.2 percent in 2012, up from 7.7 percent in 2011. Ford's pension plans beat the S&P 500 index, which was up 13 percent last year.