Board source: New details emerge each time we're told the issue has been settled.
The pension actuarial deficit at Israel Electric Corporation (IEC) (TASE: ELEC.B22) is deepening and could exceed NIS 4 billion because of a new dispute between the company and its provident fund.
Sources inform ''Globes'' that the IEC provident fund recently demanded that the company increase its commitment by an additional NIS 1.7 billion because of changes in the company's actuarial assumptions. IEC was shocked at the demand, saying in response that it would reject the demand. IEC asked the provident fund managers not to make any changes without its consent until the parties discuss the matter.
The sources added that IEC's discussed the company's pensions at its latest meeting. Several directors want clarifications from management because of the possible consequences on the company's financial standing.
A source close to the board said, "Every time we've been told that the issue of pensions has been settled, new details emerge along with demands for increasing the company's pension liability. This is unclear."
Published by Globes [online], Israel business news - www.globes-online.com - on September 15, 2008
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