Pinnacle West Capital Corp., Phoenix, plans to make voluntary contributions to its pension fund totaling up to $300 million over the next three years, said Paul Mountain, director, investor relations.
The company plans to voluntarily contribute up to $100 million each in 2015, 2016 and 2017, all years in which there are no minimum contributions required. Pinnacle West contributed $175 million to the pension fund in 2014.
The pension fund, which is open, has overall targets of 58% to long-term fixed-income assets that the company uses for liability hedging and 42% to return-generating assets.
Mr. Mountain said the fixed-income target is part of the company’s liability-driven investing strategy and will trend upward as the company’s funded status rises.
As of Dec. 31, the asset allocation was 60% fixed income, 14% domestic equities, 13% international equities, 6% partnerships, 5% real estate and 2% short-term and other investments.
The fair value of plan assets totaled $2.615 billion, and projected benefit obligations totaled $3.079 billion, for a funding ratio of 84.9%, as of Dec. 31.