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Contributions

Ford to steer $500 million to non-U.S. pension plans in 2018

Ford Motor Co., Dearborn, Mich., plans to contribute $500 million to its non-U.S. defined benefit plans in 2018, the company disclosed in its 10-K filing with the Securities and Exchange Commission on Thursday.

The company said most of the contributions are mandatory and it does not expect to make any contributions this year to its major U.S. plans.

In 2017, Ford contributed $1.6 billion to its non-U.S. plans and $133 million to its U.S. plans, both above the 2016 totals of $1.4 billion and $130 million, respectively.

Ford also noted in the filing it will make $300 million in benefit payments to participants in unfunded plans.

As of Dec. 31, U.S. plan assets totaled $44.16 billion, while projected benefit obligations totaled $46.34 billion, for a funding ratio of 95.3%. Non-U.S. plan assets as of that same date totaled $29.66 billion, while projected benefit obligations totaled $34.1 billion, for a funding ratio of 87%. The discount rate used to determine benefit obligations in the U.S. plans fell to 3.6% in 2017 from 4.03% the previous year, while the non-U.S. plans' discount rate fell to 2.33% from 2.44%.

As of Dec. 31, the actual allocation of the U.S. defined benefit plans was 49% corporate fixed income, 21.4% U.S. government fixed income, 6.9% hedge funds, 5.3% private equity, 4.9% domestic equities, 3.9% international equities, 3.6% international government fixed income, 2.8% real estate, 1.3% mortgage and other asset-backed securities, and the rest in cash and cash equivalents and other assets.

Also as of Dec. 31, the actual allocation of the non-U.S. defined benefit plans was 47.5% non-U.S. government fixed income, 16.6% other, 10.8% corporate fixed income, 5.9% each domestic equities and international equities, 4% hedge funds, 2.4% private equity, 2% U.S. government fixed income, 1.6% real estate, 1.3% cash and cash equivalents, 1% mortgage and other asset-backed securities, and the rest in various commingled funds.