(Updated at 2:15 P.M. EDT) Ford Motor Co., Dearborn, Mich., on Friday announced it would offer lump-sum payouts to a total of about 90,000 U.S. salaried retirees and former employees in its latest move in its long-term strategy to derisk its $39.4 billion U.S. pension plans.
According to an earnings presentation distributed by the company, the proposal would reduce its pension obligations and balance sheet volatility.
The move is probably the first of its kind, according to Jeremy Gold, president of Jeremy Gold Pensions, a New York-based consulting firm.
“I'm not aware of anyone who has done this without terminating or annuitizing their plan,” Mr. Gold said.
“All your lump-summing for employees is part of that (kind of) event, but ... I'm not aware of this being done on an optional basis. From their point of view, I think it's nothing but pluses,” Mr. Gold said.
“It could stimulate copycats (among other corporate pension plans) so I would think we might see a fair amount of this particularly from companies whose pension plans are liquid enough or whose capability to fund their plan is not under great stress so you might see a lot of this.”
Last month, Neil Schloss, vice president and treasurer, said the plans would shift their allocations to lower risk, changing to 80% fixed income and 20% growth-seeking equity and alternatives assets over the next few years.
As of Dec. 31, the pension plans' allocation was 52.3% fixed income, 31.4% equity, 7% hedge funds, 4.9% private equity, 3.5% cash and 0.9% real estate.
Ford made $1.1 billion in pension contributions in the first quarter, up from $300 million a year earlier, according to its earnings statement. The company on Jan. 27 said it planned to contribute a total of about $3.5 billion in cash to its global pension plans in 2012, including about $2 billion in discretionary contributions to its U.S. pension plans.
Kevin Olsen contributed to this story.