Reply #64: US firms reduce pension payments [View All]

[54anickel]

http://www.nytimes.com/financialtimes/business/FT20050412_29144_374534.html?

Uncertainty over the direction of US pension reform is leading some companies to scale back their contributions despite a deficit of more than $100bn among the top 100 schemes.

Milliman, a firm of actuaries, said a number of companies had privately admitted postponing voluntary payments for fear they would lose flexibility over their contributions in future.

This comes as Congress considers rule changes to make companies more responsible for their pension promises to employees.

Changes to accounting standards are also expected to give investors more visibility of pension liabilities.

Schemes which promise a guaranteed percentage of salary at retirement are on the wane in the US. But anecdotal evidence from actuaries suggests that attempts to reform the system can introduce further disincentives for companies.

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