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Ford’s U.S. pension plans’ funding levels up in 2012

Ford Motor Co.'s funding levels for its U.S. pension plans rose slightly in 2012, as declining interest rates largely offset strong investment gains.

At year-end 2012, the pension plans for the Dearborn, Mich.-based company, had a funding ratio of 81.3%, with $42.4 billion in assets and $52.1 billion in liabilities. That compares with a funding ratio of 80.7% at year-end 2011, when the U.S. plans had $39.4 billion in assets and $48.8 billion in liabilities, the automaker disclosed earlier this week in its 10-K annual report filed with the Securities and Exchange Commission.

Ford in 2012 settled $1.2 billion of its U.S. pension plan obligations with a trailblazing program it unveiled in April, in which it offered about 90,000 U.S. salaried retirees and former employees the opportunity to convert their monthly pension annuity into a lump-sum cash payment.

Since Ford disclosed that program, about a dozen other major employers have launched similar annuity-to-lump-sum-benefit conversion programs.

Ford said it is continuing its own conversion offer program.

Jerry Geisel writes for Business Insurance, a sister publication of Pensions & Investments.