What will be fate of Northrop Grumman?
Will Northrop Grumman Corp., one of Virginia’s largest employers, be forced into liquidating assets, selling divisions, or filing for bankruptcy protection because of the expenses involved in funding a Defined Benefit Pension Plan and Retiree Health Care costs? As General Motors goes, so goes America. GM has gone bankrupt, and those retirees are concerned about their pensions. The Pension Reform Act of 2006 enacted legislation to reduce the gap between the required assets on hand to cover pension plan liabilities for defined benefit pension plans. For example, an organization may need to have pension assets of $90 million to cover pension liabilities of $100 million. In this example, there is still a $10 million pension deficit. The following information is taken from Northrop Grumman’s 2008 Form 10-K annual statements. Pension and Post Retirement Benefit assets on Dec. 31, 2007, were $2,080 million. PPRB liabilities were $3,008 million, for a deficit of $928 million. PPRB assets on De
