Carpenter Technology carves out $165 million for pension funds

Carpenter Technology Corp., Wyomissing, Pa., expects to make a discretionary contribution of $165 million to its two defined benefit pension plans before the end of its fiscal year on June 30, confirmed Michael Hajost, vice president-investor relations and treasurer.

The Carpenter Technology pension plan had $752 million in assets and the pension plan for Latrobe Specialty Metals Inc., Latrobe, Pa., which the company acquired last February, had $90 million in assets, as of Sept. 30, Mr. Hajost said.

Mr. Hajost said in a telephone interview that the discretionary contribution is being made in an effort to “prepay” four years’ worth of contributions required following the signing of the federal highway bill by President Barack Obama in July.

The asset allocation for the pension plans currently follows the 60% equity/40% fixed-income model, but as the plans become better funded, Mr. Hajost said they “could follow a similar glidepath” as other companies that have adopted liability-driven investing strategies.

As of June 30, the company’s pension assets totaled $771 million, compared to projected benefit obligations of $1.218 billion, for a funding ratio of 63.3%, according to its most recent annual report.