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Douglas Appell, Pensions & Investments

Most large firms to boost pension contributions: Survey

December 10, 2009 - 2:09pm


Eighty-three percent of 153 large U.S. companies with defined benefit pension plans surveyed by Hewitt Associates Inc. say they expect to make additional contributions to their pension plans, with 11% of those contributing saying those contributions will have “a significant impact on their business,” Hewitt said in a statement.

However, 31% of respondents said they are more likely to consider closing their plans today than they were 18 months ago, up from 11% in 2008, Hewitt said. Similarly, 50% said they are more likely to consider freezing their plans to existing participants, surging from just 17% in 2008.

Twenty percent of the companies surveyed were more likely than last year to consider delegating their entire investment policy to professional advisers, up sharply from 4% the year before.

Almost 40% reduced their equity exposure during the past year, and 37% increased their holdings of corporate bonds.

Also, 15% implemented “dynamic investment policies,” rebalancing their asset allocation policies as their plans’ funding status improves.

The survey was conducted in September and October.

Douglas Appell is a reporter for Pensions & Investments, a sister publication of Business Insurance.

 



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