A recent article in Financial Week revealed a big surprise. ExxonMobil has the most underfunded defined benefit pension plan of all the S&P 500 companies. Yes, you read that correctly. A company yielding record profits has neglected to adequately fund its pension plan. According to the article, the ExxonMobil pension plan was funded at just above 80 percent at the beginning of 2008.
Given the current status of the world’s financial markets, the plan’s funding level has most likely dropped along with the funding levels of most pension plans. Other companies are struggling with financial hardships, making it extremely difficult to fully fund their pension plans. But ExxonMobil isn’t like those other companies. This year Exxon Mobil broke the record for the largest quarterly profit ever.
It is outrageous that the most profitable company in U.S. history had an underfunded pension plan. Many companies are now strapped for cash because of the current economic crisis. Companies struggling to stay in business have laid off thousands of workers and cut back benefits. But ExxonMobil isn’t like those other companies.
ExxonMobil has subjected its workers and retirees to potential benefit cutbacks because of the pension plan’s funding status. Restrictions required by the Pension Protection Act of 2006 take effect based on a plan’s underfunded percentage and start with pension plans that are less than 80 percent funded.
ExxonMobil, it is time to fully fund your pension plan and pay for the benefits your workers have earned. There is no excuse for a company with record-breaking profits to have an underfunded pension plan. ExxonMobil has been one of the most successful companies in recent history. Great success brings great responsibility.