Boeing Co., Chicago, plans to contribute an additional $3.5 billion to its pension plans in the third quarter, said Boeing spokesman Chaz Bickers.
The $3.5 billion discretionary contribution of Boeing common shares will be in addition to the $500 million pension contribution already planned for this year.
The additional contribution is expected to "eliminate all future mandatory pension funding through 2021 based on existing assumptions for asset returns and discount rates" and result in roughly $700 million in cash tax savings, the company said in its second-quarter earnings statement released Wednesday.
"Over the past several years, we have taken meaningful actions to retire risk and reduce cyclicality, and today's actions are another step forward," said Greg Smith, Boeing's chief financial officer and executive vice president of enterprise performance and strategy, in the earnings statement.
Boeing had $56.7 billion in pension assets and $76.7 billion in pension obligations, for an aggregate funded status of 73.9% as of Dec. 31, according to its most recent 10-K. A year earlier, the pension funds were 76% funded with assets of $56.5 billion and liabilities of $74.4 billion.
Boeing contributed $113 million to its pension plans in 2016.