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Contributions

Merck to contribute $210 million to global pension plans

Merck & Co. Inc., Kenilworth, N.J., plans to contribute about $210 million to its global defined benefit plans, the company disclosed in its 10-K filing on Tuesday.

The company said in the filing it plans to contribute about $60 million to its U.S. plans and $150 million to its non-U.S. plans. Merck contributed $58 million and $226 million, respectively, to its U.S. and non-U.S. plans in 2017.

Merck also said the expected rate of return on its U.S. DB plan and other postretirement benefits plans in 2018 will range from 7.7% to 8.3%, compared to 8% to 8.75% in 2017.

As of Dec. 31, U.S. DB plan assets totaled $10.896 billion, while projected benefit obligations totaled $11.904 billion, for a funding ratio of 91.5%, up from 90% the previous year. Non-U.S. DB plan assets as of that same date totaled $9.339 billion, while PBO totaled $9.483 billion, for a funding ratio of 98.5%, up from 93.1% the year before.

In 2017, the discount rate for U.S. DB plans and other postretirement benefit plans was 3.7%, down from 4.3% in 2016. The international DB plan discount rate for 2017 was 2.1%, down from 2.2% a year earlier.

The target allocation ranges of Merck's U.S. DB plans and other postretirement benefit plans is 35% to 55% domestic equities, 20% to 35% international equities, 20% to 35% to fixed income, and up to 5% in cash and other investments.