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Pension Funds

General Motors to steer $670 million in contributions to pension plans in 2019

General Motors Co., Detroit, plans to contribute about $600 million to its non-U.S. pension plans in 2019, the auto company disclosed in its 10-K filing with the SEC on Wednesday.

The company also disclosed it plans to contribute about $70 million to its U.S. plans. In 2018, GM contributed $1.6 billion to its non-U.S. plans and $76 million to its U.S. plans.

In September, GM had announced it planned to use the proceeds from a bond sale to prefund mandatory contributions to its Canadian and U.K. pension plans. That amount totaled $584 million, and a spokeswoman at the time said the firm expected to contribute about $1.2 billion to all its non-U.S. pension plans in 2018, which also included $300 million in payments of pension obligations for separated employees in South Korea. In GM's previous 10-K filing in February 2018, the company had said it expected to contribute $900 million to its non-U.S. pension plans.

As for the future, GM said in the current filing that "over the next five years we expect no significant mandatory contributions to our U.S. qualified pension plans and mandatory contributions totaling $310 million to our U.K. and Canada pension plans."

As of Dec. 31, according to the current 10-K filing, U.S. pension plan assets totaled $56.1 billion, while projected benefit obligations totaled $61.2 billion, for a funding ratio of 91.7%, up from 91.5% a year earlier. Non-U.S. pension plan assets as of that same date totaled $13.5 billion, while projected benefit obligations totaled $19.9 billion, for a funding ratio of 68%, up from 63.6% a year earlier.

The U.S. pension plans' discount rate as of Dec. 31 was 4.2%, up from 3.5% the previous year, while the discount rate for the non-U.S. plans was 2.9%, up from 2.7% the previous year.

The target allocation for the U.S. plans is 64% fixed income, 24% absolute return/private equity/real estate and 12% equities, while the non-U.S. plans' target allocation is 66% fixed income, 20% absolute return/private equity/real estate and 14% equities.