McKesson Corp., San Francisco, will terminate its U.S. pension plan, the company disclosed in its 10-K filing with the SEC on Thursday.
The medical supply company's board of directors voted on Wednesday to terminate the plan, which has been frozen to benefit accruals since Dec. 31, 1996. The process will not be completed until the second half of 2020 when the termination "satisfies all regulatory requirements," the company said.
"Plan participants will receive their full accrued benefits from plan assets by electing either lump-sum distributions or annuity contracts with a qualifying third-party annuity provider," the filing with the Securities and Exchange Commission said.
As of March 31, U.S. pension plan assets totaled $335 million, while projected benefit obligations totaled $485 million, for a funding ratio of 69.1%. Its discount rate for the year ended March 31 was 3.69%, up from 3.39% the prior fiscal year. In the 10-K filing, McKesson said it planned to contribute $55 million to its worldwide pension plans in fiscal year 2019. How the contributions will be split between U.S. and non-U.S. plans was not disclosed.
Also as of that date, the U.S. plan asset allocation was 66.9% fixed income, 18.2% equities, 11.6% cash and cash equivalents and 3.3% real estate.
McKesson also has pension plans in Canada, Germany, Norway and the U.K. Non-U.S. plan assets as of March 31 totaled $687 million, while projected benefit obligations totaled $1.035 billion, for a funding ratio of 66.4%. The non-U.S. discount rate for the year ended March 31 was 2.35%, the same as the previous fiscal year.
As of March 31, the non-U.S. plans' asset allocation was 62.9% fixed income, 23.6% equities, 12.8% other, and the rest in cash and cash equivalents and real estate.
Spokeswoman Kristin Hunter Chasen could not be immediately reached to provide further information.