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Pension Funds

Caterpillar to plant $170 million in pension plans in 2019

Caterpillar Inc., Peoria, Ill., plans to contribute a total of $170 million to its global defined benefit plans in 2019, the company disclosed in its 10-K filing with the SEC on Friday.

By region, the company expects to contribute $40 million to its U.S. pension plans and $130 million to its non-U.S. pension plans. Caterpillar contributed $1.04 billion to the U.S. plans and $165 million to the non-U.S. plans in 2018.

As of Dec. 31, U.S. defined benefit plan assets totaled $12.7 billion, while projected benefit obligations totaled $15.6 billion, for a funding ratio of 81.4%, up from 77.4% a year before. Also as of Dec. 31, non-U.S. defined benefit plan assets totaled $4.03 billion, while projected benefit obligations totaled $4.22 billion, for a funding ratio of 95.5%, up from 93.5% a year earlier.

The discount rate used to measure benefit obligations was 4.2% for the U.S. pension plans in 2018, up from 3.5% the previous year. The discount rate for the non-U.S. plans was 2.5%, up from 2.4% in 2017.

As of Dec. 31, the actual allocation of the U.S. DB plans was 58.7% domestic fixed income; 17% domestic equities; 11.1% international fixed income; 10.1% international equities; 3% cash, short-term instruments and other; and 0.1% real estate. As of Dec. 31, the actual allocation of the non-U.S. DB plans was 60% international fixed income; 11.8% global fixed income; 8.4% international equities; 7% domestic fixed income; 4.6% real estate; 3.7% cash, short-term instruments and other; 3.4% global equities; and 1.1% domestic equities.