The staff recognizes that pensions have an interest component; however, pensions also have a significant component representing benefit obligations to employees of the business and geographic segments.

Wilma K. Schopp, who oversees Monsanto's compensation and benefits, said that the program was created to retain the best older workers, not to reduce benefit obligations.

Just when benefit obligations will be soaring due to the retirement of the baby boom generation, the growth of taxes paid by the baby bust generation of workers behind them will be slowing down.

The baby boom generation is not only large, but it is expected to live much longer than previous generations, resulting in greater benefit obligations for Social Security.

The company in the fourth quarter recognized a $9.1 million pre-tax gain from the partial settlement of a pensioned benefit obligation.

In a statement in its filing, the company said it "is not competitive, primarily due to legacy pension and medical benefit obligations and restrictive work rules."

The gain, equivalent to $6.11 a share, results from the excess of the market value over the projected benefit obligations.

The company has, however, made it clear that it intends to seek to reduce or eliminate its benefit obligations through the bankruptcy process, which it estimates to have a total present value of $1.3 Billion.

This move was accomplished by requiring employer health plans to fulfill their benefit obligations before Medicare kicks in.

Wellpoint will "move ahead quickly to help Blue Cross of California fulfill its public benefit obligation," John Cygul, a Wellpoint spokesman, said yesterday.