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Pension Funds

Aon outlines $177 million in contributions to global pension plans

Aon PLC, London, disclosed in its 10-K filing with the SEC on Tuesday it plans to contribute a total of $177 million to its global defined benefit plans in 2018.

The company plans to contribute about $92 million, $63 million and $22 million, respectively, to its U.K., U.S. and other international pension plans during 2018, it said in the filing with the Securities and Exchange Commission.

Aon said in the filing that the other significant international DB plans are in Canada and the Netherlands. All global pension plans are closed to new participants.

During 2017, Aon contributed $119 million, $86 million and $21 million, respectively, to U.S., U.K. and other international plans.

In 2017, the U.S. DB plan discount rates ranged between 3.27% and 3.61%. The range in 2016 was 3.53% to 4.11%. Also in 2017, the U.K. discount rate was 2.63%, down from 2.77% the year before, and the range for the other international plans in 2017 was 1.78% to 3.39%. The 2016 range for those plans was 1.85% to 3.81%.

As of Dec. 31, U.K. pension plan assets totaled $5.906 billion, while projected benefit obligations totaled $4.893 billion, for a funding ratio of 120.7%, up from 116.4% the previous year. Also as of Dec. 31, the U.K. DB plan's actual allocation was 71.7% fixed income, 15.4% alternatives, 6.9% global equities, 3.5% cash and cash equivalents, and 2.5% real estate.

As of Dec. 31, U.S. pension plan assets totaled $1.958 billion, while projected benefit obligations totaled $3.155 billion, for a funding ratio of 62.1%, up from 58% the year before. The actual asset allocation of the U.S. plans as of Dec. 31 was 28% fixed income, 23.3% domestic equities, 18.4% international equities, 17.6% alternatives, 5.7% equity derivatives, 4.2% real estate and real estate investment trusts, and 2.8% cash and cash equivalents.

As of Dec. 31, the other international DB plan assets totaled $1.256 billion, while projected benefit obligations totaled $1.401 billion, for a funding ratio of 89.7%, up from 87.7% the year before. For the other international plans, the actual allocation as of Dec. 31 was 65% fixed income, 31.5% global equities, 2.1% alternatives, 0.9% cash and cash equivalents, and 0.5% REITs.