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U.S. Addendum
Weekly Q&A
How is the health of Nalco's pension plan?
Should I as an employee be worried about the pension plan -- will it be there
to support me?
From Bill Joyce:
"We're quite comfortable that we can cover the promises we have made to
employees regarding their pension.
Today, Nalco made a quarterly contribution to the Nalco Company Retirement
Income Plan Trust of just over $6 million, and will contribute another $13.7
million before year-end. Nalco intends to make further regular contributions to
the pension trust
in amounts necessary to maintain prudent funding
levels, as determined not only by applicable laws, but in consultation with
Hewitt Associates, our independent actuary.
As you know, Nalco's U.S. pension plan is underfunded, with a present value of
all of the money we owe employees that has accumulated to date (often referred
to as the Accumulated Benefit Obligation, or ABO) of $379.3 million and assets
of $191.1 million at December 31, 2004. This is not an outsized burden for a
company with $3 billion in revenue and with the expectation of $200 million of
free cash flow this year. Nalco's Board of Directors has concurred that the
solvency level of our pension fund does not present an unnecessary risk."
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