Sears really didn’t need any more problems, financial or otherwise. Yet the company does have a problem that doesn’t involve its loss of $1.7 billion last year, run-down stores, fleeing customers, and alleged problems with suppliers? The company’s employee pension plan also isn’t doing very well, which has been another drain on the company’s finances.

Sears wouldn’t tell the Wall Street Journal exactly what it has invested its pension fund in that has led to such poor returns, but last year the fund posted a return of 1.5%. Those aren’t very good results during a year when a fund with middling performance earned about 7% last year.

The company has added $2.85 billion to the pension fund during the last decade. For a company like Sears, that isn’t a lot of money year to year, but it’s also $2 billion that they aren’t spending on things that could improve the company’s financial future.

Employees who have been at Sears or Kmart before 2006 are part of the pension plan, so it is still receiving contributions. (Sears and Kmart merged to form Sears Holdings Corporation in 2005.) A company spokesman explained to the WSJ that the company is still meeting its pension obligations. Better performance of its investments in future years may help the plan to keep making payments to retirees for as long as they live.

Poor Returns Weigh on Sears Pension Plan [Wall Street Journal]

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