Despite charges by the federal pension agency that some corporate operations in the Baltimore area have underfunded pension funds, most of the companies say they have sound plans.
"Our pensions are in sound financial condition," said Mike Ascolese, a spokesman for Allied Signal Inc., which has 3,600 workers at 10 sites in Maryland.
On Monday, the Pension Benefit Guaranty Corp. said 50 of the nation's largest pension funds had a combined shortfall of $14 billion.
Companies with Maryland operations cited in the report, along with their alleged shortfalls, are Allied Signal Inc., $92 million; Westinghouse Electric Corp., $286 million; American National Can Co., $426 million; Bethlehem Steel Corp., $1.2 billion; Cyclops Industries, $66 million; and General Motors Corp., $1 billion.
Ascolese said Allied has several pension funds, some overfunded and some underfunded. The overfunded have a surplus of $510 million, while the underfunded lack about $196 million -- for a total surplus of $314 million, he said. But even the underfunded plans have at least 94 percent of their complete funding, he said.
"The listing was incomplete and somewhat misleading," Ascolese said of the PBGC release.
Two other companies, General Motors and Cyclops, said they make the required contributions to their pension plans, but point out that Internal Revenue Service rules limit the amount of deductible pension payments that can be made.
"We continue to fund our plan to meet all requirements," said Cyclops spokesman Edward M. Romanoff. Cyclops owns the Eastern Stainless Corp. on Rolling Mill Road, which has a work force of about 670. "The pension plans at Eastern Stainless are in good shape," Romanoff said.
General Motors, which has a plant on Broening Highway with 3,250 workers, has a pension plan that is 95 percent funded, according to Terrence P. Sullivan, manager for sales and financial reporting for General Motors. "We contribute annually not less than required by law and not more than can be deducted for federal income tax," he said.
The underfunded pension funds at American National Can came from acquisitions the company made in the 1980s, according to Walter T. Stelzel, executive vice president and chief financial officer of American National.
He said the company, which operates a can manufacturing plant in Sparrows Point, recognized that underfunding and is making contributions in excess of those required by law. "We are taking positive action to eliminate the problem," Stelzel said.
He also pointed out that the PBGC study did not include about half of American National's other pension funds, which have NTC
$516 million in assets to cover $421 million in guaranteed benefits.
A spokesman for Bethlehem Steel Corp. said the listing was "counterproductive" and a disservice to the company.
The company, which employs more than 7,000 people at its Sparrows Point operations in Baltimore County, objected to the Pension Benefits Guaranty Fund using "underfunded" rather than "unfunded."
The spokesman said Bethlehem has always met minimum funding requirements. However, because of the downturn in the steel business during the early and mid-1980s, the number of Bethlehem pensioners skyrocketed as employees took early retirement. Because of the poor performance of the company, Bethlehem did not make extra contributions.
The spokesman said the company was well aware that the size of the unfunded benefit obligation had to be reduced. Instead of seeking funding waivers as others companies did, it resolved to make contributions when financial conditions allowed, he said.
Starting in 1987, Bethlehem has made hundreds of millions in additional pension contributions to bolster the fund, the spokesman said. The Bethlehem Steel intends to continue making these contributions as long as the company remains profitable.
A spokesman for Westinghouse, which has about 16,000 employees at its operation near the Baltimore-Washington International Airport and other parts of the state, said its pension plan represent more than 90 percent of the total value of the future pension benefits to be paid. While a company spokesman said this was a healthy ratio, Westinghouse will continue to improve this ratio until it achieves 100 percent funding.