GM to gas up non-U.S. pension plans with $500 million

General Motors Co., Detroit, expects to contribute about $500 million to its non-U.S. pension funds in 2021.

The automaker also expects to contribute about $70 million to its U.S. non-qualified pension funds during the year, according to a 10-K filing Wednesday with the SEC.

In 2020, GM contributed $396 million to the non-U.S. plans and $68 million to the U.S. plans, according to the filing.

As of Dec. 31, non-U.S pension plan assets totaled $13.846 billion, while projected benefit obligations totaled $20.807 billion, for a funding ratio of 66.5%, down from 69.9% a year earlier.

The discount rate for the non-U.S. plans dropped to 1.62% as of Dec. 31 from 2.16% the year before.

The non-U.S. plans’ target allocation is 66% fixed income, 18% other (absolute return, private equity and real estate) and 16% equities.

Also as of Dec. 31, U.S. pension plan assets totaled $61.077 billion, while PBO totaled $66.468 billion, for a funding ratio of 91.9%, up from 91.6% the year before.

The U.S. plans’ discount rate as of Dec. 31 was 2.37%, down from 3.2% from a year earlier.

The U.S. plans’ target allocation is 64% fixed income, 24% other (absolute return, private equity and real estate) and 12% equities.

Complete actual allocation information for Dec. 31 was not provided for the U.S. and non-U.S. plans.

Separately, GM disclosed in the 10-K filing it reduced its weighted-average long-term rate of return on assets for its U.S. plans to 5.6% as of Dec. 31 from 5.9% a year earlier.

The change was the result of an investment policy study conducted in December that resulted in changes to the plans’ capital market assumptions, the filing said.

Source: Pensions & Investments