IBM to Pump $3 Billion Into Its Pension Plan

IBM Corp., the world’s biggest seller of computers and related services, will pay $3 billion this year instead of $4.5 billion over three years to fund its U.S. pension plan.

IBM said in October that the funding gap was $4.5 billion and that it would pay $1.5 billion a year to close it. The shortfall has narrowed because of stock market gains since October, Chief Financial Officer John Joyce said in a statement.

U.S. companies including General Motors Corp. and Boeing Co. have had billions of dollars of losses in employee pension plans, forcing them to take writedowns and add cash to the plans to pay benefits.

IBM declined to say what effect the pension funding would have on fourth-quarter or 2002 earnings. The company is expected to earn $1.30 a share in the quarter and $3.91 this year, the average estimates in a Thomson First Call survey of analysts.

IBM shares were up 63 cents to $84.32 in after-hours trading after the announcement.