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Pension Funds

DowDuPont to pump $430 million into pension plans in 2019

DowDuPont Inc., Midland, Mich., plans to contribute about $430 million to the Dupont and Dow Chemical defined benefit plans in 2019, according to the company's 10-K filing with the Securities and Exchange Commission on Monday.

Dow Chemical and E.I. du Pont de Nemours & Co. completed a merger of equals on Aug. 31, 2017, but the companies' defined benefit plans have not been merged.

Of that total, $240 million would go to the Dow global DB plans and $190 million to the DuPont global pension plans.

DowDuPont did not disclose how much would go to individual U.S. and non-U.S. pension plans. In 2018, the company contributed $1.3 billion to the DuPont global DB plans and $1.7 billion to the Dow global DB plans, according to the 10-K filing. Dow and Dupont's principal U.S. plans each received $1.1 billion in discretionary contributions in the third quarter.

As of Dec. 31, DowDuPont's overall pension plan assets totaled $41.46 billion, while projected benefit obligations totaled $53.01 billion, for a funding ratio of 78.2%, up from 76.1% a year earlier. The discount rate for DowDuPont's DB plans in 2018 was 3.8%, up from 3.26% in 2017.

As of Dec. 31, Dow global DB plan assets totaled $22.5 billion, down from $23.4 billion a year prior. Its asset allocation was 36% equity, 35% fixed income, 28% alternative investments and 1% other.

DuPont's global pension plan assets totaled $18.9 billion as of Dec. 31, down from $20.3 billion at the end of 2017, according to the 10-K filing. Its asset allocation was 50% fixed income, 35% equity, 13% alternative investments and 2% other.

In a letter DowDuPont CEO Ed Breen posted online in November for plan participants, he said that a new Dow company, which will be formed when the materials science division of DowDuPont separates on April 1, will assume responsibility for all heritage Dow Chemical U.S. pension and retiree benefit obligations.