FedEx Corp., Memphis, Tenn., plans to contribute an additional $1.5 billion to its U.S. pension plans in the third quarter of its fiscal year 2018, said spokeswoman Katie Wassmer in an email.
The contribution is in addition to the $1 billion the company announced in its 10-K filing with the SEC in July that it planned to contribute in the fiscal year, which ends on May 31.
The additional contribution is one of three major programs FedEx announced "following the recently enacted U.S. Tax Cuts and Jobs Act," which includes $200 million in increased compensation and $1.5 billion in investments to upgrade its hubs in Indianapolis and Memphis, according to a news release Friday.
The pension contribution will be funded through "available debt financing sources," the news release said. The minimum required contribution for the pension plans is $700 million for the fiscal year, the company had previously disclosed in the 10-K filing.
As of May 31, U.S. pension plan assets totaled $24.93 billion, while projected benefit obligations totaled $27.87 billion, for a funding ratio of 89.5%, an improvement over the previous year's 82.8% funding ratio, according to the 10-K filing.
As of May 31, also according to the 10-K filing, the U.S. pension plans' actual allocation was 33% corporate fixed-income securities, 19% government fixed-income securities, 14% international equities, 13% global equities, 10% domestic large-cap equities, 4% domestic smidcap equities, 2% each mortgage-backed securities and alternatives, and the rest in other.