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Pension Funds

Ford to shift $650 million into non-U.S. pension plans in 2019

Ford Motor Co., Dearborn, Mich., plans to contribute about $650 million to its non-U.S. defined benefit plans in 2019, the company disclosed Thursday in a 10-K filing with the Securities and Exchange Commission.

Ford said it does not expect to contribute to its major U.S. pension plans in 2019.

In 2018, Ford contributed about $400 million to its non-U.S. plans and did not contribute to its U.S. plans. In its 10-K filing from last year, the company said it planned to contribute $500 million to its non-U.S. plans in 2018.

As of Dec. 31, U.S. plan assets totaled $39.8 billion, while projected benefit obligations totaled $42.3 billion, for a funding ratio of 94%. Non-U.S. plan assets as of that same date totaled $27.3 billion, while projected benefit obligations totaled $31.1 billion, for a funding ratio of 87.7%. The discount rate used to determine benefit obligations in the U.S. plans rose to 4.3% in 2018 from 3.6% the previous year, while the non-U.S. plans' discount rate rose to 2.5% from 2.3%.

As of Dec. 31, the actual allocation of the U.S. defined benefit plans was 50% corporate fixed income, 25.7% U.S. government fixed income, 8% hedge funds, 5.1% private equity, 3.2% domestic equities, 3.1% real estate, 2% international equities, 2.7% international government fixed income, 1.2% mortgage and other asset-backed securities, -2.5% other, and the rest in cash and cash equivalents and other assets.

Also as of Dec. 31, the actual allocation of the non-U.S. defined benefit plans was 54.5.% non-U.S. government fixed income, 16.7% other, 10.5% corporate fixed income, 4.6%% domestic equities, 4.2% hedge funds 3.8% international equities, 2.5% private equity, 2% U.S. government fixed income, 1.5% real estate, 1% mortgage and other asset-backed securities, -2.4% cash and cash equivalents, and the rest in various commingled funds.