Recent pension reform will spark change in nearly 30% of corporations offering defined contribution plans, according to the latest quarterly survey of corporate CFOs by Financial Executives International and Baruch College's Zicklin School of Business. As a result of the Pension Protection Act, 28% of companies with 401(k) plans have changed or expect to make changes based on the law's provisions, while 33% have not made a decision yet and 39% anticipate no change in the near term. Of those considering changes, most are likely to add automatic enrollment, with investment advice and adding Roth options also being considered.
CFOs also remain optimistic about the economy, the survey found. Their average ranking of economic optimism was down only slightly in the third quarter to 67.6, compared to 68.6 in the second quarter. Company-specific optimism declined even less, to 75.5 from 76.3 last quarter. The scale ranges from one to 100, with the higher number reflecting the most optimism.
The CFO Outlook Survey, which interviewed 171 corporate CFOs, was conducted the week of Sept. 18.
In a separate survey, 81% of senior finance executives at public and private companies believe that companies should be required to account for pension plans on their balance sheets. The survey of 381 executives was conducted by global accounting firm Grant Thornton during the last week of August, one month before the Financial Accounting Standards Board issued its new pension accounting standard. Also, 65% believe there should be greater transparency in financial reporting, and nearly 80% believe there should be uniform global accounting standards. About 75% think SEC Chairman Christopher Cox is doing a good job.