More than two-thirds of corporate pension executives said the Pension Protection Act will require them to make larger contributions to their plans, but many executives see the costs and risk of their plans as manageable, according to initial findings in a Towers Perrin survey.
According to the survey, 67% of the 126 corporate financial executives responding to an online questionnaire said they expected their pension contributions to rise, with 44% of the 126 pegging the increase at 10% or less, while 7% expected their contributions to rise by more than 50%. More than half — 53% — were at least somewhat prepared to deal with the new funding requirements, while 39% said they were well prepared.
Also, 49% with fully operating defined benefit pension plans expect to continue with the same or similar benefits, while 17% expect to close the plans for new hires. Another 9% plan to continue their plans but reduce future benefit accruals, while 5% plan to freeze benefits for current participants. Concerning cash-balance conversions, 14% were at least somewhat likely to convert while 63% said a conversion was unlikely.
Only 3% of the respondents believed the new law would allow the PBGC "to manage its liabilities without further action by Congress," the survey said.
Final results will be released when 300 executives are surveyed, a spokeswoman said.