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Pfizer to contribute $1.34 billion to pension plans in 2017

Pfizer Inc., New York, will contribute $1.16 billion to its U.S. qualified pension plans in 2017 and $175 million to its international plans, the company announced in a 10-K statement filed Thursday with the Securities and Exchange Commission.

The company contributed $1 billion to U.S. qualified plans and $209 million to international plans in 2016.

“It is our practice to fund amounts for our qualified pension plans that are at least sufficient to meet the minimum requirements set forth in applicable employee benefit laws and local tax laws,” the 10-K statement said.

For U.S. qualified plans, the 2017 contribution includes a $1 billion voluntary contribution “which was considered pre-funding for future anticipated mandatory contributions and is also expected to reduce Pension Benefit Guaranty Corp. variable rate premiums,” the 10-K statement. This amount was paid in January 2017, according to the 10-K.

Global pension assets last year totaled $20.239 billion as of Dec. 31, including $12.56 billion in U.S. plan assets and $7.68 billion for international plans. At year-end 2015, total global pension assets were $19.59 billion, including $11.63 billion for U.S. plans and $7.96 billion in international assets.

The funding ratio for U.S. qualified plans was 80.8% at the end of 2016 vs. 77.9% a year earlier. The international plans were 79.3% funded vs. 86.4% in at the end of 2015.

The combined funded ratio was 80.2% as of Dec. 31, down from 81.2% at year-end 2015.

“The favorable change in the funded status of our U.S. qualified plans was primarily due to an increase in the actual return on assets, partially offset by plan losses resulting from the decrease in the discount rate at the end of 2016,” the 10-K statement said. “The unfavorable change in the international plans' funded status was primarily due to plan losses related to a decrease in the discount rate, reflecting lower interest rates, partially offset by an increase in the actual return on plan assets.”

The discount rate for qualified U.S. pension plans was 4.3% last year vs. 4.5% in 2015. The discount rate for international pension plans was 2.4% vs. 3.1% in 2015.

The asset allocation for qualified U.S. pension plans last year was 40.1% equity, 34.9% fixed income, 19.7% other and 5.3% cash and cash equivalents.

The asset allocation for international pension plans last year was 40.2% fixed income, 34.7% equity, 19.4% other and 5.7% cash and cash equivalents.