Daimler to Contribute €2.5 Billion to Pension Fund

Daimler AG says it will move €2 billion in cash to its German pension funds to offset growing underfunding caused by low interest rates.

The funded ratio of Daimler's pension program, which compares actual fund value with future pension obligations, was 63% at the end of last year. The gap indicated the program was underfunded by €8.6 billion.

Chief Financial Office Bodo Uebber says the new contribution will guarantee future pension payments.

Analysts suspected Daimler would divert some of its growing cash trove to pension funding. The company reported nearly €18 billion in cash at the end of September.