In its first quarter earnings statement, Ford said the voluntary payout is part of the company’s long-term strategy to de-risk its global funded pension plans. If an individual elects to receive the lump-sum payment, the company’s pension obligation to the individual will be settled.
Payouts will start later this year and will be funded from existing pension plan assets. This is in addition to the lump-sum pension payout option available to U.S. salaried future retirees as of July 1, 2012.
“Continuing to improve the underlying strength of our balance sheet remains a fundamental part of financing the One Ford plan,” said Bob Shanks, Ford executive vice president and chief financial officer. “Providing the option of a lump-sum payment to current salaried U.S. retirees and former employees will reduce our pension obligations and balance sheet volatility.”