I Pledge Allegiance…to My Pension Fund

In a year of cost cuts, most companies that sponsor pension plans are holding on to them.

Of all the ways they might cut back, CFOs don’t seem to be targeting pension plans. A recent survey of 191 U.S. finance executives by CFO Research Services on behalf of Towers Perrin finds a majority saying they plan to keep their plans rather than ditch them, and that they have the cash flow to do it even in a year when market losses have hammered the funds.

Related research by Watson Wyatt indicates that the percent-age of companies freezing their plans increased only slightly in the past year, from 27% in 2008 to 31% in 2009. Why? For most, such moves don’t result in true savings. “Few companies can freeze a plan and not have to replace it with something else, like a richer 401(k) match,” says Alan Glickstein, senior retirement consultant for Watson Wyatt.

CFOs' views on their companies' pension funds

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