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The AAO Weblog covers accounting issues and current events as they relate the practice of investment analysis. All posts prior to September, 2007 are in the public domain, but after September 4, only subscribers to The Analyst's Accounting Observer will see all posts going forward. Only selected, occasional posts will be released to the public domain from September 4 forward.

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Employers To DB Pension Plans: Drop Dead!
Location: BlogsAAO Weblog (Public)    
Posted by: Jack Ciesielski 8/25/2005 6:47 AM
Yesterday, PricewaterhouseCoopers released one of its quarterly "Management Barometer" surveys of over 147 CFOs and Managing Directors, of which 71 (48%), are associated with firms having a defined benefit pension plan. Purpose of the survey: what do you really think about your defined benefit pension plans?

A small sample, for sure. Yet the findings are pretty consistent with what you'd expect:

- The top concern of 73% of large employers with a defined benefit pension plan report that their number-one concern is expense and funding volatility.

- Most firms - 67% of them that made a plan change during the past three years, or expect to do so - consider freezing it or closing it to new hires as viable options for handling the volatility concerns.

- About half of the firms planning changes within the next 12 months will consider terminating their plan.

Reform of pension plan reporting is likely - and it will likely increase cost volatility. Continued worship of that bitch-goddess "smooth earnings" will lead cowardly managements to abandon an employee benefit that they once considered to be an attractive way to reward and retain valued employees.

(As long as they didn't have to clearly report what it cost...)
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