Strong stock and bond returns as well as international performance produced asset gains of more than 20% for many of the largest corporate defined benefit and defined contribution plans ranked by Pensions & Investments in the one-year period ended Sept. 30.
Among the corporate defined benefit standouts were American Airlines, Allied-Signal Inc. and Chrysler Corp.
Defined contribution stars included some of the funds mentioned above as well as Caterpillar Inc.
A 40% total return on American's long duration bond fund, which represents half of the defined benefit fund's $3.6 billion in assets, boosted the fund, said Dennis O'Hara, vice president-trust investments of AMR Investment Services, Fort Worth, Texas. AMR oversees American Airlines' employee benefit assets.
American's defined benefit assets jumped 28% to $3.6 billion.
"Government zero-coupon bonds benefited from the dramatic interest rate drop," Mr. O'Hara said.
Other factors were the fund's solid results on domestic stocks and other bonds, which averaged 16% for the year ended Dec. 31.
AMR's stock strategy of choice also had a good year. "The value style did very well," he added.
Allied Signal's $1 billion increase in defined benefit assets to $6 billion was the result of "returns and rounding," according to Ed Tokar, vice president-investments. He added there were no unusual corporate transactions.
But there was an unusual transaction at Chrysler, where the Chrysler Master Retirement Trust defined benefit assets grew 70% to $8.798 billion, through a combination of "substantial contributions and excellent performance," said Russ Flynn, manager-pension fund investments.
Figures on performance and contributions to the underfunded plan will be released when 1993 earnings are reported, he said. The fund contributed $807 million to the pension fund in 1992. In 1993, Chrysler contributed half the proceeds of a $1.45 billion stock offering and made a regular pension fund contribution one analyst estimated at up to $800 million in an effort to wipe out half of the fund's $3.9 billion unfunded liability by 1995 (Pensions & Investments, Jan. 25, 1993).
On the defined contribution side, American's 401(k) plan got a lift from increased contributions and good returns, Mr. O'Hara said. The 401(k) plan grew to more than $1 billion, he said.
The plan's new international equity option had a good year, attracting considerable new money.
American has about $2 billion in a money purchase plan. Participants won when the plan increased its allocation to international just before September 1992, a period when the asset class did very well, Mr. O'Hara said.
Caterpillar's defined contribution assets doubled to $1 billion, largely due to strong returns of the company's stock, which represents more than half the assets.
Michael Pond, investment officer at Caterpillar Investment Management Ltd., the in-house manager for the pension fund, said the company's stock appreciated 63% in 1993.