The Defense Logistics Agency said Ford Motor Co. has failed to supply necessary information about an overfunded pension fund at the car maker’s former aerospace division in Newport Beach.
When New York-based Loral Corp. acquired Ford Aerospace earlier this year, Loral allowed Ford Motor to keep about $100 million of surplus funds in Ford Aerospace’s employee pension program.
The transaction supplemented Loral’s $715-million bid for Ford Aerospace--now Loral Aerospace--and helped it beat out other suitors for the Ford Motor defense and communications unit.
But the federal government is conducting a preliminary audit of the transaction to determine if it has a claim on a portion of the overfunded amount.
Mark Miller, a Ford Motor Co. spokesman, said the company has fully cooperated with government attorneys and provided all the documents requested by the Pentagon agency.
But Larry Wilson, a DLA spokesman, disputed that statement. The agency, he said, has not received information that would enable it to calculate the overfunded amount of the pension fund, which sources say is around $300 million.
As a result, he said, the agency cannot calculate the portion of the fund that was paid for with taxpayer money. Under government contracting law, the government sets aside a portion of any defense contract as payment into a company’s pension plan. If the fund is overfunded, the agency can seek to recover its share.
Wilson said the agency is talking with the company about setting a deadline for receiving the information. He declined to comment on any enforcement action the agency could take if Ford does not comply.
A Loral spokesman said the company has fully complied with the agency’s requests for data. He said Loral was unaware of any dispute between Ford and the DLA about the pension fund.
In any case, Loral officials said the matter would have no effect on Ford Aerospace pensioners because the pension fund still retains a surplus sufficient to meet all obligations.
In January, 1989, the Pentagon inspector general estimated that the government was entitled to $90.9 million out of $527.3 million contained in 12 overfunded pension programs that were terminated between 1982 and 1987.
Bernard Schwartz, Loral’s chairman, said in a recent interview that he doesn’t believe the government is entitled to any of the pension surplus and that the government had made no formal claim for the money.
Wilson said determining the amount owed the government would be difficult to determine. “Without the paper work from Ford, it’s impossible to tell what the amount is,” he said.