Newsday from New York, New York • 33

I 4 4 BUSINESSI 33 Underfunded Pension Gap Grows 50 worst underfunded plans hurt by drop in interest rates STAFF AND WIRE REPORTS Washington US companies with the 50 most underfunded pension plans let the gap between promised retirement benefits and the money set aside to pay for them widen by $9 billion last year a federal agency said yesterday The Pension Benefit Guarantee Corp which assembles the 50-worst list each year said the underfunding grew by 31 percent to $38 billion in 1992 from $291 billion in 1991 The gap is the difference between plan assets and the estimate of how much the plans need to meet future pension liabilities About $317 billion of the latest figure is guaranteed by the agency The PBGC said underfunding increased primarily because of falling interest rates But it also said funding by many companies did not keep pace with Most pension plans are fully funded the PBGC said adding that those with gaps are concentrated in the automobile and steel industries General Motors accounted for about $8 billion of the increase in underfunding Chrysler Corp on the other hand reduced its underfunding by about $3 billion to $13 billion Last week GM said it would contribute about $5 billion of stock toward its plan which the PBGC says is about $20 billion short The PBGC was created in 1974 to guarantee payment of basic private de-flned-benefit pensions Its programs cover more than 41 million workers and retirees in 67000 plans Over the years the PBGC has become less important as more companies have adopted defined-contribution pension plans which make no benefit guarantees growing liabilities because of weaknesses in current law interest rates declining companies should have been contributing larger amounts to their pension plans to keep their liabilities said Martin Slate executive director of the pension insurance agency For several years the PBGC has used the annual list as a lobbying tool to urge Congress to adopt tougher pension funding laws The proposed overhaul would speed sponsor contributions to underfunded plans and enhance authority to require compliance increase insurance premiums for plans considered most at risk and require simply understood disclosure information for plan participants The National Association of Manufacturers has criticized the annual list saying it creates unnecessary anxiety Indeed inclusion on the list does not reflect on a company's financial health nor necessarily mean a benefits are in immediate jeopardy the PBGC emphasized iifK 7 -i --k ft i fife "I 1 company said Ticketmaster Holdings Group Ltd had been controlled ty Chicago's Pritzker family Allen is investing well over $300 million according to a source close to the companies TREASURY AUCTION The Treasury Department sold $1398 billion in three-month bills at an average discount rate of 314 percent up from 311 percent last week An additional $1406 billion was sold in six-month bills at an average discount rate of 330 percent up from 326 percent last week The new discount rates understate the actual return to investors 321 percent for three-month bills with a $10000 bill selling for $992150 and 340 percent for a six-month bill selling for $983410 Separately the Federal Reserve said the average yield for one-year Treasury bills the most popular index for making changes in adjustable rate mortgages rose to 358 percent last week up from 355 percent the previous week BUSINESS NY NEW YORK NEWSDAY TUESDAY NO EMBER 23 1993 UN THE MARKETS shareholders ahead of next annual meeting season TIMES SQUARE STORY One of the most prominently empty storefronts in the modern green building at 1540 Broadway in the heart of Times Square may become a giant showcase for the recently formed music-and-video venture between Virgin Records and Blockbuster Entertainment feel confident that the area is on the way up in terms of image being cleaned up and the people going said a Virgin official who is negotiating a lease for 65000 square feet with building owner Bertlesmann AG The space has been empty since the building was erected in 1990 in one of the most prominent financial disasters in 1980s real estate speculation DISCOVERING A NEW CARD Dean Witter Discover Inc finally found a way to issue a bank credit card and announced that NationsBank will issue its Prime Option MasterCard early next year The Wall Street securities firm which owns the Discover card tried to issue the Prime Option card with a Visa logo two years ago but Visa sued to block it claiming Discover a competitor shouldn't have rights to its trade secrets MasterCard had a similar suit against Dean Witter but dropped it to issue the co-branded card because NationsBank and not Dean Witter is the issuer and a member of MasterCard The Prime Option card will carry 99 percent interest rate for the first two months that a balance is carried then the rate jumps to 99 percent above prime currently at 6 percent The card has no annual fee THIS GETS HAIRY The consumer chief warned that New Yorkers may be losing their shirts as well as their hair in their quest for Acting Commissioner of Consumer Affairs Richard Schrader said consumers are being misled by exaggerated claims about the effectiveness of hair loss treatments He charged three companies with violating the Consumer Protection Law: the Chambers Hair Institute Hair and Skin Treatment and For Men Only Ltd Schrader said the Chambers Hair Institute in Secaucus NJ claims in advertisements that its hair transplants are immediately and Schrader said however that transplanted hair initially almost always falls out and then grows back after several months The commissioner also criticized claims by the other two companies THE TICKET Microsoft cofounder Paul Allen has agreed to buy a majority share in the parent of Ticketmaster Corp a leading computerized ticketer that serves 2500 clients in 40 states Europe Canada and Australia Allen will become Ticket master's chairman the Food Network Starts but Not Here Yet WITH THANKSGIVING ALMOST here the new Television Food Network starts on cable TV today But the turkey may get to the table before the new 24-hour channel turns up on the tube in much of the region unlikely that the 24-hour network whose debut is scheduled for 7 pm will be on Time Warner in the city today said Robert Jacobs vice president of the locxd Time Warner cable group He said replacing a network with the food network would require 30 notice to subscribers Time Warner and the food network have an agreement in principle however for Time Warner to carry the network nationally and the network expects to be available to about 7 million subscribers by Jan 1 The programing will include features on restaurants and reports cm nutrition One of the shows will be anchored by Donna Hanover Giuliani an experienced television journalist and wife of the mayor-elect Times Mirror Cable Television Inc the cable TV subsidiary of Times Mirror Co parent of Newsday and New York Newadqy is a partner in the food network TUNE IN TO PHONE HOME MCI Communications Corp and a leading cable television company announced an experiment that will allow consumers to use their cable TV wire for long-distance calling Although the telephone companies have been moving quickly to establish relationships with cable companies that will lead to interactive television services the trial by MCI and Jones Lightwave Inc is the first time a cable TV company will offer phone service The first MCI-Jones trial scheduled for March in Alexandria Va will allow residential users to bypass the Bell Atlantic local phone company to make long-distance calls GOLDEN HANDSHAKE SPOTLIGHT Regulators tightened rules governing the way corporations divulge executive pay to shareholders closing a loophole that allowed them to pay big bonuses to outgoing officers without disclosing the arrangements The Securities and Exchange Commission voted 4-0 to adopt the revisions which add to the sweeping changes it made to executive compensation disclosure regulations in 1992 The changes take effect in time for companies to include the beefed up data in the proxy statements they will mail to INTEREST SHOCK Fears that US interest rates are headed higher sent shock waves through global stock markets hammering shares from Japan to New York The Dow Jones industrial average finished down 2376 points to close at 367025 and Standard Poor's composite index of 500 stocks fell 347 points to 45913 The price of the Treasury Department's main 30-year bond which has plummeted nearly 3 points in the past week fell another point or $750 per $1000 in face value Its yield which moves in the opposite direction jumped to 638 percent from 633 percent late Friday BOTTOM LINE WANDERING BOSSES Life at the top may not be as easy as it seems A new survey of chief executives shows that 75 percent are looking for a better job and that as a group top corporate leaders are not a happy lot The survey of nearly 1400 chief executives conducted jointly by the executive search firm Paul Kiiy Berndtson and the Cornell University Center for Advanced Human Resource Studies challenges the conventional wisdom among executive recruiters The study showed that 75 percent of those surveyed had conducted some type of job inquiry or hud begun to explore other job opportunities in the previous 12 months and that 58 percent actually had initiated contacts with other employers about a job change exploration falls into two distinct job categories: preliminary exploration in which executives gather information about available job alternat i ves and active job the study said Compiled from staff and wire reports.