More Than One-Fourth Of Plan Sponsors Lack A Funding Policy For Their Defined Benefit Plans

Source: Mercer, September 22, 2008

Turbulent economic conditions expose need for stronger risk management.

Economic turbulence, demands for increased financial disclosure, changes in financial reporting and increased pension funding requirements are combining to make defined benefit pension plan risks more obvious, and requiring more proactive management by plan sponsors. Yet, an analysis of the funding policies of more than 250 defined benefit plans conducted by Mercer reveals that 27 percent fail to develop and then adhere to a formal, well-documented funding policy. Altogether, 51 percent of sponsors surveyed fund only the minimum amount required by law, either by default or intentionally.

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