|
|
ONLINE FEATURES
Book Reviews
BW Video
Columnists
Interactive Gallery
Newsletters
Past Covers
Philanthropy
Podcasts
Special Reports
BLOGS
Auto Beat
Bangalore Tigers
Blogspotting
Brand New Day
Byte of the Apple
Economics Unbound
Eye on Asia
Fine On Media
Green Biz
Hot Property
Investing Insights
Management IQ
NEXT: Innovation
NussbaumOnDesign
Tech Beat
Working Parents
TECHNOLOGY
J.D. Power Ratings
Product Reviews
Tech Stats
Wildstrom: Tech Maven
AUTOS
Home Page
Auto Reviews
Classic Cars
Car Care & Safety
Hybrids
INNOVATION
& DESIGN Home Page Architecture Brand Equity Auto Design Game Room SMALLBIZ Smart Answers Success Stories Today's Tip INVESTING Investing: Europe Annual Reports BW 50 S&P Picks & Pans Stock Screeners Free S&P Stock Report SCOREBOARDS Hot Growth 100 Mutual Funds Info Tech 100 S&P 500 B-SCHOOLS Undergrad Programs MBA Blogs MBA Profiles MBA Rankings Who's Hiring Grads | |
NOVEMBER 1, 2004
Edited By Toddi Gutner RETIREMENT Underfed Pensions Just when corporate America's pension funds were starting to perk up, a sluggish stock market is knocking them down again. The pension plans of companies in the Standard & Poor's (MHP ) 500-stock index will likely end 2004 with a 19% shortfall between their assets and obligations to retirees. That's even bigger than last year's 13% gap, says Credit Suisse First Boston (CSR ) accounting analyst David Zion. Why? While investment returns have been flat, companies have withdrawn money to pay benefits. Meanwhile, obligations to future retirees continue to climb. The deterioration comes on the heels of a sharp improvement in 2003, thanks to a strong stock market. Some companies may be forced to shore up their beleaguered plans with cash contributions in 2005. Among those Zion expects to divert a large percentage of operating cash flow to their plans: Goodyear Tire & Rubber (GT ) and Navistar International (NAV ). Navistar says the $220 million it put into its pension plan this year should suffice. Goodyear expects to contribute up to $350 million in 2005. The good news: If the interest rates used to discount -- or calculate -- the value of pension obligations continue to climb, the size of those obligations will fall. So pension funds could swing into the black. Bear Stearns (BSC ) analysts project an aggregate surplus for the S&P 500 of 2% by 2006. By Anne Tergesen WINE A Fool-Proof Wine Stopper With Pizzazz Safe or stylish? That's the conundrum top vineyards face when deciding between a traditional cork, which can taint wine, or a screwcap, which many consumers see as too tacky for a good bottle. Aluminum giant Alcoa (AA ) offers a solution that could let vintners offer both: Vino-Lok is a glass stopper with a rubberized ring that, like a screwcap, prevents contamination or oxidation. But like a cork, it's elegant. Wineries can color or engrave the stopper with their logo. To open the bottle, you twist and pull out the stopper, much like a Champagne cork. You can also reinsert the stopper. Alcoa says Vino-Lok will appear on wine bottles early next year. By Jane Black   Q&A Are You Paying Too Much For That Bond? Q: I have been buying mortgage bonds from my broker. Most of these I buy in $100,000 denominations. What does my broker make in commissions on each of these? I'm guessing 1% to 2%. -- Eric Gerencser, Myrtle Beach, S.C. A: Pretty good guess. A broker typically would mark up the securities 1% to 3%. If you want to know what the firm's take is, ask. If your broker won't tell you, try a discount brokerage. Instead of taking a percentage cut of a bond's face value, some charge a flat fee. Vanguard, for example, gets $50 per bond trade of any size. For $100,000 in mortgage bonds, Fidelity Investments would charge $500 for a round-trip (buy and sell) trade. 
| | |
 Copyright 2004, by The McGraw-Hill Companies Inc. All rights reserved.Terms of Use | Privacy Notice |
Printer-Friendly Version
