International Business Machines Corp., Armonk, N.Y., expects to contribute about $600 million to its non-U.S. defined benefit and non-U.S. multiemployer pension funds in 2014, according to the company's most recent 10-K filing.
The amount is the legally mandated minimum contribution and will be contributed mainly to defined benefit pension funds in Japan, the U.K. and Switzerland. In 2013, the company contributed $449 million to its non-U.S. pension funds and $57 million to its non-U.S. multiemployer plans, according to the filing. The expected $600 million contribution in 2014 could change if investments affect the funded status of the company's non-U.S. plans and alter legally mandated minimum contributions, according to the 10-K. The filing also stated that IBM might contribute more than the legal minimum.
As of Dec. 31, the company was not legally required to make any contributions to its U.S. pension funds. The funding ratio for IBM's U.S. pension funds increased to 105.7% in 2013, up from 94.4% at the end of 2012, the 10-K said.
The company reported $53.9 billion in assets for its U.S. defined benefit plans as of Dec. 31, an increase of 0.6% over 2012.
The discount rate used to measure benefit obligations for the U.S. plans rose to 4.5% in 2013, up from 3.6% in 2012.
As of Dec. 31, the actual asset allocation for IBM's U.S. pension funds was 43.9% fixed income, 34.7% equities, 7% private equity, 5.6% real estate, 4.3% cash, 4.1% hedge funds and the rest in other investments.
The 2013 equity allocation was up 1.5 percentage points from the previous year, while the allocation to cash increased 2.1 percentage points. Allocations to fixed income, private equity, real estate, hedge funds and other investments moved less than one percentage point from the 2012 allocations.
