UPDATE 1-Aetna sees lower '09 profit with bigger pension hit

NEW YORK Jan 12 (Reuters) - Aetna Inc (AET.N) said on Monday an expense tied to its pension fund would be bigger than it previously expected, leading the health insurer to project a decline in annual operating earnings in 2009.

The No. 3 U.S. health insurer, whose shares fell 2.5 percent, projected an increase in pension expense of 54 cents per share, up from its previous expectation of 30 cents to 40 cents. The weak markets have led to the higher pension expenses.

Aetna expects its 2009 operating earnings to be "slightly lower" than in 2008. Previously, it expected growth of 3 percent to 5 percent.

Excluding the pension expense, Aetna projected 2009 operating earnings per share growth of 12 percent to 14 percent. That forecast is unchanged, according to Wachovia analyst Matt Perry.

"Aetna's business fundamentals remain strong and we enter 2009 with what we believe will be industry-leading gains in membership despite the weakening economy," CEO Ron Williams said.

Aetna shares fell 69 cents to $28.51 in morning trading on the New York Stock Exchange. (Reporting by Lewis Krauskopf; Editing by Derek Caney)