“We have been under a reinvention of NCR going on for five-plus years, and along the way we have been focused on moving some very significant big issues forward,” NCR chairman and CEO Bill Nuti said in a conference call with investors. “A large part of that focus has to do with dealing with legacy issues.”
Combining $500 million of contributions to the plan through capital-market borrowing and the lump-sum payments, NCR expects to improve its underfunded position by about $800 million, officials said. The underfunded position is approximately $1.3 billion, Nuti said.
For its $300 million projection in lump-sum payments, the company estimated about 70 percent of eligible former employees will choose that option, Nuti said.
Tuesday’s announcement was the second phase of a pension repayment plan that included a 2010 move that changed its portfolio to entirely fixed income assets. Officials said NCR will not make cash contributions to the U.S. pension plan until at least 2018.
“We are very focused on eliminating pension entirely and from the point of view of not being in the pension business, if you will, going forward,” Nuti said.
NCR Chief Financial Officer Bob Fishman called the plan announced Tuesday an “aggressive, yet balanced approach” toward solving its underfunded pension issues. It was not immediately available how many eligible former NCR employees live in southwest Ohio.
Nuti said more moves will come in the future to correct the company’s pension issues but underlined the plans announced Tuesday as important for the company.
“This is a massive step for NCR in the right direction,” Nuti said.
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