Fifty-one companies so far have announced they will contribute a combined $17.35 billion to their pension funds in 2015, Pensions & Investments' stories show.
Of that amount, about $3.9 billion in 2015 pension contributions were announced by 12 companies during the two-week period ended March 6.
Estimates by Towers Watson & Co. saw a 29% drop in cash contributions between 2013 and 2014. Although a wide range of factors determines contribution choices for individual plans, Alan Glickstein, Dallas-based senior retirement consultant at Towers Watson, sees overall 2015 contributions being roughly on par with last year.
Mr. Glickstein also noted many corporate plan sponsors made large contributions to address lower funding levels in the years immediately after the financial downturn, so the subsequent decline in contribution amounts was expected.
“Sooner or later you're going to be putting in lower amounts,” Mr. Glickstein said.
In the most recent announcements, BP PLC, London, said it expects its contributions this year to its pension funds worldwide will total $1.25 billion. The company also announced, in its annual report released March 3, that it expects to contribute a total of $4.72 billion to its U.K. defined benefit plans through 2021. The company expects to make no contributions to its U.S. pension funds this year.
As of Dec. 31, the BP U.K. pension funds had $31.773 billion in assets and $32.416 billion in liabilities; U.S. plans, $8.355 billion in assets and $11.875 billion in liabilities; eurozone funds, $1.973 billion in assets and $8.327 billion in liabilities; and other regions, $1.735 billion in assets and $2.638 billion in liabilities.
AT&T Inc., Dallas, plans to contribute $735 million to its pension funds in 2015, the company's Feb. 20 10-K filing shows. The filing also disclosed that AT&T is offering a lump-sum payment to certain management employees who retire on or before March 31. Eligible employees had until March 6 to accept the offer. As of Dec. 31, the company's defined benefit plans had $45.2 billion in assets and $59.5 billion in pension obligations, for a funding ratio of 76%.
Exxon Mobil Corp., Irving, Texas, expects to contribute $560 million to its non-U.S. pension funds in 2015, the company said in its Feb. 25 10-K filing. The company did not disclose any planned contributions for its U.S. pension funds. At the end of 2014, the company's U.S. defined benefit plans had $12.92 billion in assets and $20.53 billion in obligations for a funding ratio of 62.9%. As of the same date, the non-U.S. pension funds had $20.1 billion in assets and $30.05 billion in obligations for a funding ratio of 66.9%.
ConocoPhillips Co., Houston, expects to contribute about $300 million total to its global qualified and non-qualified pension and post-retirement benefit plans in 2015, the company's Feb. 24 10-K filing indicates. Of the $300 million, about $110 million will go to the company's U.S. pension and post-retirement plans, and $190 million to its non-U.S. pension and post-retirement plans. At the end of December, the U.S. pension funds had $3.27 billion in assets and $4.39 billion in liabilities for a funded status of 74.5%. The non-U.S. pension funds ended 2014 with $3.28 billion in assets and $4 billion in liabilities for a funded status of 82%.
Sears Holdings Corp., Hoffman Estates, Ill., expects to contribute $275 million to its U.S. pension fund in 2015, said a Sears spokesman. In 2014, Sears' unfunded pension obligation rose to $2.3 billion from $1.5 billion in 2013 because of new mortality assumptions and a 90-basis-point drop in the discount rate, which raised pension liabilities by $300 million and $500 million, respectively, a company statement said. As of Jan. 1, the company's U.S. pension fund had $3.62 billion in assets and $5.88 billion in liabilities, for a funding ratio of 61.56%. The U.S. pension plan was frozen for all employees on Jan. 1, 2006.
Exelis Inc., McLean, Va., expects to contribute between $175 million and $185 million to its $4.56 billion defined benefit plan in 2015, its Feb. 27 10-K filing shows. In 2013, the company announced its intention to freeze the defined benefit plan at the end of 2016. The pension fund was closed to new employees in September 2011, before Exelis was spun off from ITT Corp., spokes-man B.J. Talley said. On Feb. 6, the company announced that it is being acquired by Harris Corp. The cash and stock transaction worth about $4.75 billion will create a single company with combined retirement plan assets of about $10 billion. Harris Corp. has about $3.5 billion in defined contribution plan assets. Exelis also had $2.29 billion defined contribution assets as of Dec. 31, according to the 10-K.
American International Group Inc., New York, plans to contribute about $173 million total to its global pension funds in 2015, the company's Feb. 20 10-K filing indicates. Of the total, about $100 million will be contributed to the AIG Retirement Plan, a qualified defined benefit plan for U.S. employees. At the end of December, AIG's U.S. plans had $4.11 billion in assets and $5.77 billion in projected benefit obligations, for a funding ratio of 71.2%; at the end of November, its non-U.S. plans had $708 million in assets and $1.1 billion in PBO for a funding ratio of 64.4%.
Prudential Financial Inc., Newark, N.J., plans to contribute $125 million to its pension funds in 2015, said its 10-K filing Feb. 23. The contribution covers both U.S. and non-U.S. plans; the company's U.S. plans are overfunded, while its non-U.S. plans have a funding ratio of about 41%. As of Dec. 31, U.S. pension fund assets totaled about $12.4 billion, while the U.S. projected benefit obligations totaled about $10.9 billion, for a funding ratio of 113.8%, while non-U.S. plan assets totaled $651 million, and PBO totaled $1.6 billion, for a funding ratio of 40.7%.
Coca-Cola Co., Atlanta, announced in its 10-K filing Feb. 25 that it plans to make a discretionary contribution of $90 million to its non-U.S. pension funds. The company does not plan to make a contribution to its U.S. pension fund. As of Dec. 31, global pension fund assets totaled $8.9 billion and projected benefit obligations totaled $10.35 billion, for a funding ratio of 86%.
Xcel Energy Inc., Minneapolis, contributed $90 million to its U.S. defined benefit plans in January to meet minimum funding requirements, the company said in a 10-K filing Feb. 20. Xcel's U.S. pension plans had a combined $3.08 billion in assets as of Dec. 31, up 2.5% from the previous year. The plans' combined funded status as of Dec. 31 was 79% vs. 86% a year earlier.
Textron Inc., Providence, R.I., plans to contribute a total of about $80 million to its defined benefit and defined contribution plans in 2015, said the company's most recent 10-K filed Feb. 25. As of Jan. 3, the company had $7 billion in total defined benefit assets and $8 billion in obligations for a funding ratio of 87.5%.
Altria Group Inc., Richmond, Va., announced in its 10-K filing Feb. 25 that it plans to contribute between $20 million and $50 million to its pension funds in 2015. As of Dec. 31, Altria's pension plans had $7.3 billion in assets and $8.33 billion in PBO, for a funding ratio of 87.6%.