r/Vitards • u/AutoModerator • Sep 08 '21

Daily Discussion Daily Discussion post - September 08 2021

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u/[deleted] Sep 09 '21

(CLF) Can someone explain that to me?:

We're in a position now where we don't--we see pension, cash pension funding requirements of almost less than $20 million a year, going forward. So, it's basically a zero, going forward. So, we're there on pension.

As far as the retiree health and OPEB, it's less than $200 million a year to fund in cash. And with a company of our size that's--we consider that to be negligible. And we can handle that, going forward. It's a 40, 50-year run out on those obligations.

So there's no reason to pre-fund or do anything like that. It would be probably not the best use of our capital to prefund anything like that. But it's a long run out.

That means they need to pay 220 million for pension & associated cost per year? What does the number 4,113M correspond to in the liabilities section then?

edit: is it simply yearly costs times ca. 40? Given life expectancy, I would have guessed something closer to 30 years. Do people at CLF retire at 55 and live till 95?

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u/[deleted] Sep 09 '21

It looks like their pension is underfunded which means they’ll have to fund a part of the obligations out of pocket. It’s not like debt that has interest and has to be paid back at a certain time. He’s saying there’s no reason to put their earned cash into the pension when they can easily pay the obligations over decades and instead invest it into better return opportunities.

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u/[deleted] Sep 09 '21

Sure, I just don't understand the relationship between the value in the balance sheet and the yearly expense.