FedEx to deliver $800 million to U.S. pension plans in fiscal year 2023
FedEx Corp., Memphis, Tenn., plans to make $800 million in voluntary contributions to its U.S. pension plans during its fiscal year ending May 31, 2023.
The shipping company disclosed the contribution in its 10-K filing with the SEC on Monday. The injection of cash into the plans will come despite the lack of minimum required contributions under the Employee Retirement Income Security Act of 1974.
In the most recent fiscal year ended May 31, FedEx contributed $533 million to the plans.
FedEx also disclosed that its actual rate of return for its U.S. pension plan assets was -10.8% for the fiscal year ended May 31, well below its expected rate of return of 6.5%.
“Negative portfolio returns (were) derived due to losses in both equities and our fixed-income assets due to market volatility and rising interest rates,” the 10-K filing said.
For the year ended May 31, the Russell 3000 index and Bloomberg U.S. Aggregate Bond index returned -3.7% and -8.2%, respectively.
As of May 31, the actual allocation of U.S. pension plans was 26% corporate fixed-income securities, 17% government fixed-income securities, 14% alternatives, 13% each domestic large-cap equities and international equities, 5% each global equities and mortgage-backed securities/other, 4% cash and cash equivalents, and 3% domestic smidcap equities.
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