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ASSET OWNERS

Delta Air Lines charts $1 billion in pension plan contributions this year

Delta Air Lines Inc., Atlanta, plans to contribute at least $1 billion to its defined benefit plans in 2016, said its recently released 10-K filing with the Securities and Exchange Commission.

Delta said the contributions will include $500 million above the minimum funding requirements.

The airline had announced in May 2014 its intention to contribute at least $1 billion per year to the plans to reach an 80% funding ratio by 2020.

Delta did improve its funding ratio slightly during 2015 to 45.4%, up from 42.8% the previous year.

During 2015, Delta’s plan assets rose by just $19 million, to $9.374 billion from $9.355 billion the previous year. Delta contributed $1.219 billion to its plans, although that was mostly offset by $1.059 billion in benefits paid, an investment loss of $132 million and $9 million in settlements.

The majority of the improvement in funding ratio came from a drop in liabilities, to $20.61 billion from $21.86 billion the previous year, due to an increase in the discount rate to 4.57% from 4.14% the year before.

The plan’s target allocation is 40% to 50% growth-seeking assets, which includes equities; 25% to 30% risk-diversifying assets, which includes alternatives; and 20% to 30% income-generating assets, which includes fixed income.

As of Sept. 30, the actual allocation was 39.8% global equity, 23.8% other alternatives, 16.7% domestic fixed income, 9.8% private equity, 3.9% real estate, 3.7% other, 1.9% international fixed income and 0.4% cash, according to Pensions & Investments data.

Kay Allison, manager-retirement plans, did not return a phone call seeking further information by press time.