`HEALTHY SURPLUS': Eaton Corp. thrives with huge stock allocation; 20 years ago, company boosted equities in pension fund to 70%; now it's at 90% level.(Brief Article)(Statistical Data Included)

Pensions & Investments, September, 2001 by Kennedy, Mike

CLEVELAND - The $1.8 billion defined benefit plan of Eaton Corp. has grown by $700 million in the last decade despite its unconventional asset allocation and the fact the company has been on a contribution holiday since the mid to late 1980s. The Cleveland-based industrial manufacturing firm ended 1991, the year it became fully funded, with an 83% allocation to equities, primarily domestic, and a 17% allocation to cash.

At the time, the plan had $1.1 billion in assets. Now the plan has a 90% allocation to equities, of which 10 percentage points is international; 5% to Treasury inflation-protected securities; 5% to cash; and a fraction of a percentage point to private equity. It also has a ``healthy surplus,'' said Robert Elliott, assistant treasurer, who...

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