Overseas excursions add to load

DOZENS of companies are preparing to pump hundreds of millions of dollars into their out-of-money defined-benefit superannuation programs over the next few years, as part of efforts to help claw back losses.

DOZENS of companies are preparing to pump hundreds of millions of dollars into their out-of-money defined-benefit superannuation programs over the next few years, as part of efforts to help claw back losses.

While Australian companies mostly closed out their defined-benefit schemes during the 1990s, those that have expanded overseas through acquisition have usually inherited costly programs.

Among Australia's top 20 companies just one Wesfarmers has a defined-benefit scheme that is in surplus. Wesfarmer' surplus has come in at $5 million, up from

$4 million the year before.

BHP Billiton pumped $US336 million into its out-of-money scheme last year, helping to narrow the deficit to $US177 million from $US215 million a year earlier.

The banks all have sizeable defined-benefit schemes, with the bulk of obligations due to various forays into the UK. Westpac has the biggest deficit at $676 million, NAB has a $295 million deficit and ANZ's loss is $225 million. Exposure to the UK also resulted in Commonwealth Bank's defined-pension scheme swinging to a loss of $7 million last year from a surplus of $234 million the year before.

Telstra has been working to reduce the loss on its $2.7 billion defined-pension scheme, which peaked at $457 million two years ago. Last year the loss on that fund narrowed to $194 million.

AMP's recent acquisition of AXA Asia-Pacific delivered a jump in superannuation liabilities, with the deficit last year blowing out to

$370 million from $67 million.

APRA said companies often had to top up in-house schemes at the same time as their profits came under pressure.

Related Articles