Caterpillar to move $510 million into pension funds this year

caterpillar

Caterpillar Inc., Peoria, Ill., is expected to contribute $510 million to its defined benefit pension funds in 2014, according to its 10-K filed Tuesday.

It will contribute $270 million to its non-U.S. plans and $240 million to its U.S. plans, down from $303 million and $541 million, respectively, in 2013. The plans ended the year 86% funded, up from about 70% a year earlier. Caterpillar contributed more than $1 billion total in 2012 to all plans.

Assets for the U.S. plans were $12.4 billion, with $14.42 billion in liabilities, as of Dec. 31. The non-U.S. plans had $3.95 billion in assets and $4.61 billion in liabilities. The discount rate used to measure benefit obligations was 4.6% for the U.S. plans, up from 3.7% at the end of 2012.

At the end of 2013, the U.S. plans had an asset allocation of 36% domestic equity, 34% fixed income, 25% international equity and 5% other. The target allocation is 60% equity and 40% fixed income.

The non-U.S. plans ended the year with an asset allocation of 53% equity, 37% fixed income, 6% real estate and 4% other. The target allocation is 59% equity, 32% fixed income, 7% real estate and 2% other.