Seventy-one percent of executives at U.S. defined benefit plans surveyed by Towers Perrin are working to keep their DB plans going long-term.
However, 40% of those surveyed said they would be “very likely” to reconsider that long-term commitment if pension accounting rules made their company income statements more volatile, according to a news release detailing the survey findings.
More than 76% of those planning to stick with their plan said they are shifting their investment strategy to focus more on risk than returns.
“As plan sponsors look forward, they will have to balance their near-term and long-term objectives with their appetite for risk,” Mike Archer, Towers Perrin principal and chief actuary, said in the release.
“They should consider how their pension plans will perform under a broad range of potential economic and capital market conditions, and how that performance correlates with — or deviates from — overall company performance. Many will recognize that this holistic approach leads to a dynamic strategy that produces optimal financial results.”
The full survey, conducted in April and May, included 439 senior finance executives from large U.S., U.K. and Canadian companies.