Instructional Case: Bethlehem Steel's Pension Fund Disclosures.

This article reports that Bethlehem Steel Corp. is a Delaware corporation that was incorporated in 1919. It is engaged primarily in the manufacture and sale of a wide variety of steel mill products and secondarily produces and sells coal and other raw materials, constructs and repairs mobile offshore drilling platforms and ships, and manufactures forgings, castings, wire rope, and railroad cars. The intense competitive conditions within the domestic steel industry have been associated with a number of bankruptcy filings by steel producers. During 1986-1987, approximately 20 percent of the U.S. steel production capability was in, or had gone through, reorganization under Chapter 11 of the U.S. Bankruptcy Code. It is informed that the U.S. companies first began offering pension plans to employees in the latter part of the nineteenth century. Initially, retirement benefits were paid directly from a company's current earnings rather than being funded through advance contributions to a trusteed pension fund. Beginning in 1928, however, enacted tax laws permitted employers to deduct pension fund payments as a business expense.