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cut cap spending to plug pension holes-survey
- Nearly a quarter of mid-sized firms in four of the world's largest
economies are cutting capital spending to help plug pension funding black
holes, while over half say the pension burden is hitting profits, a survey
on Thursday showed.
22 percent of 151 firms in Britain, the United States, Canada and Holland
said the gap between current assets and expected pension liabilities had
forced them to cut capital spending, a survey by SEI Investments showed.
survey, carried out a time when firms have been reporting big gaps between
assets and expected pension payouts, shows that 32 percent of firms with
underfunded pension schemes are changing their business plans as a result.
22 percent of executives we surveyed attributed the reduction in their
capital spending to their current or expected future funding
requirements," Jim Morris, senior vice president, institutional asset
management, at SEI, told Reuters.
survey showed that Some 58 percent of the poll sample said the state of
their pension scheme had directly affected their profitability.
many as 90 percent of the firms surveyed said they had taken some steps to
cope with the plight of their pension arrangements. Some 27 percent had
closed their defined benefit plans.
the ready access to capital markets enjoyed by bigger corporations,
mid-sized and smaller companies face tougher choices about how to keep
their pension fund intact," said SEI's Morris. In Britain, for
example, about two thirds of pension schemes run by the UK's largest firms
have funding deficits, when measured according to new accounting rules
aimed at raising transparency in company pension costs, according to
advisers Mercer Human Resources Consulting in April.
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