Coca-Cola puts $1.1 billion in pension funds
Atlanta beverage giant changes its U.S. pension plan's target allocations too
By Rob Kozlowski | February 27, 2013 3:04 pm
Coca-Cola Co., Atlanta, contributed $1.1 billion to its worldwide defined benefit pension plans in 2012, according to a 10-K filing with the SEC on Wednesday.
The company also announced changes to the target allocations of its U.S. pension plans that it plans to complete by the end of the first quarter of 2013.
The new targets are: 42% equities, 30% fixed income and 28% alternatives. The previous targets, according to the company's previous annual report, were: 51% equity, 31% fixed income and 18% alternatives.
Within equity, the company changed its targets to 60% global equity, 24% domestic small-cap and midcap, and 16% emerging markets, eliminating the categories the company had at the end of 2011. Previous targets were: 39% domestic large-cap, 33% international and 28% domestic small-cap equity.
In the 10-K the company states, “Our investments in global equities are intended to provide diversified exposure to both U.S. and non-U.S. equity markets. Our investments in both emerging market equities and domestic small- and midcap equities are expected to experience larger swings in their market value on a periodic basis. “
Within fixed income, the previous liability-driven focus has been scaled back, with the target to long-duration fixed income reduced to 33% from 71% of the overall fixed-income target. High-yield debt, which had a target of 29% at the end of 2011, has been eliminated, and the fund now has a target of 67% to multistrategy alternative credit managers, which the company says consists of a “combination of high-yield bonds, bank loans, structured credit and emerging market debt.”
Specific increases in alternatives were not addressed, although the company added reinsurance to its list of alternative strategies, which also includes hedge funds, private equity limited partnerships, leveraged buyout funds, international venture capital partnerships and real estate.
As of Dec. 31, the worldwide pension plans' assets totaled $7.584 billion, compared with $9.693 billion in projected benefit obligations, for a funding ratio of 78.2%.
Company spokesman Petro Kacur wrote in an e-mail that the company had no further comment beyond the contents of the 10-K filing.