International Paper Co. officials could “elect” to make a discretionary contribution to IP’s $6.7 billion U.S. pension plans in the next year, even though they have no obligation to do it, the company’s quarterly SEC filing shows.
In the filing, the company said its U.S. non-qualified plans are only funded to the extent of benefits paid, which are expected to total approximately $40 million this year. The company did not contribute to its defined benefit plans in 2008.
“Pension obligation has a lot more uncertainty around it (than corporate debt), and so one of the things we will be evaluating is whether or not we want to make a pension contribution sooner than we would otherwise be required to,” Tim Nicholls, CFO of the Memphis, Tenn.-based company said, according to a transcript of an industry conference in September.
“We have no funding requirement this year, no funding requirement next year. One of the options is that we fund early and try to take advantage of that benefit.”