Ford Motor Co., Dearborn, Mich., plans to contribute about $3.5 billion in cash to its global pension plans in 2012, the company said in its fourth-quarter earnings statement Friday.
About $2 billion will be discretionary contributions to its U.S. pension plans.
Ford made $1.1 billion of contributions during 2011.
Separately, Ford expects its global pension obligations to be fully funded over the next few years, Lewis W. K. Booth, CFO, said in an earnings call Friday. At the end of 2011, the unfunded liability of Ford's global pension plans was $15.4 billion, with its U.S. plans underfunded by $9.4 billion.
The company also noted plans for derisking its pension plans, discretionary cash contributions and to “better match plan assets to plan obligations.”
Ford earned a 7.7% return on its U.S. pension assets during 2011, down from 14% in 2010, according to a presentation accompanying the company's earnings call. The discount rate used to calculate pension obligations fell to 4.64% in 2011 from 5.24% a year earlier.
Ford's assumed rate of return was 7.5% in 2011, down from 8% in 2010.
Ford had U.S. defined benefit plan assets of $39.1 billion as of Sept. 30, according to Pensions & Investments data. The company's non-U.S. defined benefit plan assets totaled $18.6 billion as of Dec. 31, 2010, according to the company's latest 10-K.
Separately, Honeywell International Inc. and 3M Co. each announced plans to contribute between $800 million and $1 billion to its defined benefit pension plans.
“Our guidance assumes level contributions over the course of 2012 of $200 (million) to $250 million per quarter, but we'll actually do that as the year unfolds and we'll manage that measure as the year unfolds,” David John Anderson, senior vice president and CFO at Morristown, N.J.-based Honeywell, said in an earnings call Friday.
Honeywell reported a fair value of plan assets of $12.18 billion with projected benefit obligations of $14.99 billion, for a funding ratio of 81.3% as of Dec. 31, 2010, in its 10-K filing. According to P&I data, the company had $12.685 billion in defined benefit assets as of Sept. 30.
The firm has an assumed rate of return of 9% and a discount rate of 5.3%.
As of Sept. 30, Honeywell's asset allocation was 45% domestic equity; 16% international equity; 15% domestic fixed income; 10% private equity; 7% real estate; 5% cash; and 2% other alternative investments, according to P&I.
Honeywell spokesman Robert C. Ferris could not provide further information at press time.
As reported on Pionline.com on Thursday, 3M, St. Paul, Minn., will make $600 million of its 2012 contribution in the first half of the year, David W. Meline, senior vice president and CFO, said during the company's earnings call on Thursday. A presentation accompanying the call stated $300 million each will be contributed in the first and second quarter of the year.
In 2011, the company contributed $600 million total to the plans.
3M had $11.4 billion in U.S. defined benefit plan assets as of Sept. 30, according to P&I data.