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Administration June 10, 2003
KFC Parent Foresees $100M Pension Shortfall for 2002
October 18, 2002 (PLANSPONSOR.com) - The Louisville,
Kentucky company that owns and operates 30,000 fast food
restaurants expects its company pension plan will be
underfunded by about $100 million in 2002.
Reported by Fred Schneyer
According to an Associated Press report, that revelation came from Yum! Brands Inc., parent company of the Kentucky Fried Chicken, Pizza Hut and Taco Bell chains, in a US Securities and Exchange Commission filing.
The company blamed the pension shortfall on interest-rate declines and the weak stock market, the AP reported.
Yum! said it doesn’t believe the pension plan underfunding will hurt its financial position, but will likely record a charge to shareholders’ equity as result, the AP report said.
In its 2001 annual report, the company said its pension plan had projected benefit payments of $420 million with a fair value of plan assets at $291 million as of 2001.
Yum! has a lot of company among corporations struggling with underfunded pensions. One particularly hard hit sector: the US auto industry.