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Pension Funds

UPS to deliver $2 billion to pension funds in 2019

United Parcel Service Inc., Atlanta, expects to contribute $2 billion to its U.S. pension plans in 2019, the shipping company disclosed in a 10-K filing with the SEC on Thursday.

UPS contributed $19 million to the U.S. plans in 2018 and $7.3 billion in 2017. It also disclosed in the Securities and Exchange Commission filing that it expects to contribute $63 million to its international pension plans this year. The company contributed $80 million and $77 million, respectively, to those plans in 2018 and 2017.

As of Dec. 31, U.S. pension plan assets totaled $39.55 billion, while projected benefit obligations totaled $45.33 billion, for a funding ratio of 87.3%, down from 91.5% a year earlier. As of that same date, international plan assets totaled $1.28 billion, while projected benefit obligations totaled $1.55 billion, for a funding ratio of 82.7%, up from 80.7% a year earlier.

In 2018, the discount rate for the U.S. plans was 4.5%, up from 3.84% the previous year, and the discount rate for the international plans was 2.94%, up from 2.78% in 2017.

As of Dec. 31, the actual allocation of UPS' U.S. pension plans was: 42.1% fixed income, 13.3% domestic large-cap equities, 9.3% international equities, 8% hedge funds, 7% private equity, 5.9% global equities, 5% real estate, 4.7% emerging markets equities, 2.1% private debt, 1.4% domestic small-cap equities, 0.5% risk parity, 0.4% cash and cash equivalents and 0.3% structured products.

As of that same date, the actual allocation of the international pension plans was: 27.1% international/global equities, 25.2% fixed income, 16.2% other, 13.3% local markets equities, 9.4% real estate, 3.5% cash and cash equivalents, 2.7% U.S. equities and 2.6% emerging markets equities.