Conference 7.286::digital

2200.0. "UNISYS retiree medical benefits cut" by MRKTNG::SILVERBERG (Mark Silverberg DTN 264-2269 TTB1-5/B3) Thu Nov 05 1992 07:13

VNS COMPUTER NEWS:                            [Tracy Talcott, VNS Computer Desk]
==================                            [Nashua, NH, USA                 ]

    Tuesday's Market                               Digital Fair Market Value
      Quote     Change                              2-Dec-1991   $60.6875
 IBM   69 1/8	+  1/4				   29-May-1992   $42.4375
                                                   85% of lower  $36.250
    Wednesday's Market	   Dow Jones    Change      1-Jun-1992   $40.750
 DEC   34 1/2	unch.	   3223.04	-29.44

 Unisys - Planning to stop funding of retiree medical benefits
	{The Wall Street Journal, 4-Nov-92, p. B4}
   Unisys also announced it will take a big charge for such benefits.  Unisys
 said it plans to adopt the accounting change for medical benefits, as well as
 an accounting change for income taxes, in the first quarter of 1993.  It
 expects to take a charge of not more than $170 million for the benefits
 accounting rule.  That will be more than offset by an expected $325 million to
 $425 million benefit for the tax accounting change.  The benefits accounting
 rule, which takes effect in 1993, requires that U.S. companies set up
 reserves on their balance sheets for projected costs of both current and
 future retiree medical benefits.  In the past, many firms have recognized only
 the annual cost of such benefits in the year in which they are paid.  Unisys
 said that because of escalating health-care costs, it plans to phase out over
 three years the subsidy it pays for retirees' coverage, and will end the
 subsidies in January 1996.  The company currently pays nearly 100% of the cost
 of health insurance for retirees, a spokesman said, adding it has nearly
 25,000 retirees and eligible dependents.  After 1996, the retirees will be
 able to continue their coverage at group rates, he said.  The spokesman noted
 that active employees currently  make come contribution to health coverage.
 If Unisys hadn't made any changes in the retiree plan, it estimated, it would
 have to take a charge of about $700 million, and the annual expense for the
 retiree program would have been about $100 million in 1993 and would have
 increased yearly.  In 1992, the company said it will spend nearly $200 million
 on health-care expenses in the U.S., which it said is almost equal to its net
 income for the first nine months.
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<><><><><><><><>   VNS Edition : 2699    Thursday  5-Nov-1992   <><><><><><><><>