Xcel Energy Inc., Minneapolis, contributed $125 million to its U.S. qualified pension plans in January, according to a regulatory filing.
The contribution represents the total minimum funding requirements for 2021 and further contributions are not planned, said the company's 10-K statement, filed Feb. 17 with the Securities and Exchange Commission.
Xcel contributed $150 million to its qualified plans in 2019 and noted in the filing that it made required contributions each year from 2018 through 2021 to meet minimum funding requirements.
As of Dec. 31, Xcel's defined benefit plan assets totaled $3.6 billion, while projected benefit obligations were $3.96 billion, for a funding ratio of 90.8%, up from 86% a year earlier.
Xcel officials said in the filing that "benefit obligations for both pension and post-retirement plans increased from Dec. 31, 2019 to Dec. 31, 2020 due primarily to decreases in discount rates used in actuarial valuations."
The discount rate as of Dec. 31, for the company's pension plans was 2.71% vs. 3.49% as of the same date in 2019, according to the filing.
The asset allocation for Xcel's defined benefit plans in 2020 was 35% each to domestic/international equity and long-duration fixed income; alternative investments, 15%; short-/intermediate duration fixed income, 13%; and cash, 2%.
In the SEC filing, Xcel said that its "ongoing investment strategy is based on plan-specific investment recommendations that seek to minimize potential investment and interest-rate risk as a plan's funded status increases over time."
In addition, "the investment recommendations result in a greater percentage of long-duration fixed income being allocated to specific plans having relatively higher funded status ratios and a greater percentage of growth assets being allocated to plans having relatively lower funded status ratios."