Trickle down

2 August 2017 By Tom Buerkle Follow @tombuerkle

International Paper is borrowing to stoke its retirement fund. Rising plan costs and a desire to lock in tax benefits before any reduction in rates prompted the move. With other firms likely to follow, this is one way Trump’s fiscal policies can trickle down to the little guy.

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International Paper on July 31 announced it was borrowing $1 billion and using the proceeds to make a $1.25 billion voluntary contribution to its defined-benefit pension plan. The company, which had $3.4 billion in unfunded pension obligations at the end of 2016, will pocket a tax benefit of about $400 million from the move.

Unfunded liabilities of the 100 largest U.S. corporate defined-benefit plans rose by 1.4 percent in June to $285 billion, according to pension consultants Milliman.

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