Skip to main content
MENU
Subscribe
  • Subscribe
  • Account
  • LOGIN
  • Topics
    • Alternatives
    • Consultants
    • Coronavirus
    • Courts
    • Defined Contribution
    • ESG
    • ETFs
    • Hedge Funds
    • Industry Voices
    • Investing
    • Money Management
    • Opinion
    • Partner Content
    • Pension Funds
    • Private Equity
    • Real Estate
    • Russia-Ukraine War
    • SECURE Act 2.0
    • Special Reports
    • White Papers
  • Rankings & Awards
    • 1,000 Largest Retirement Plans
    • Top-Performing Managers
    • Largest Money Managers
    • DC Money Managers
    • DC Record Keepers
    • Largest Hedge Fund Managers
    • World's Largest Retirement Funds
    • Best Places to Work in Money Management
    • Excellence & Innovation Awards
    • Eddy Awards
  • ETFs
    • Latest ETF News
    • Fund Screener
    • Education Center
    • Equities
    • Fixed Income
    • Commodities
    • Actively Managed
    • Alternatives
    • ESG Rated
  • ESG
    • Latest ESG News
    • The Institutional Investor’s Guide to ESG Investing
    • Climate Change: The Inescapable Opportunity
    • Impact Investing
    • 2022 ESG Investing Conference
    • ESG Rated ETFs
  • Defined Contribution
    • Latest DC News
    • DC Money Manager Rankings
    • DC Record Keeper Rankings
    • Innovations in DC
    • Trends in DC: Focus on Retirement Income
    • 2022 Defined Contribution East Conference
    • 2022 DC Investment Lineup Conference
  • Searches & Hires
    • Latest Searches & Hires News
    • Searches & Hires Database
    • RFPs
  • Performance Data
    • P&I Research Center
    • Earnings Tracker
    • Endowment Returns Tracker
    • Corporate Pension Contribution Tracker
    • Pension Fund Returns Tracker
    • Pension Risk Transfer Database
    • Future of Investments Research Series
    • Charts & Infographics
    • Polls
  • Careers
  • Events
    • View All Conferences
    • View All Webinars
    • 2022 Innovation Investing Conference
    • 2022 Defined Contribution East Conference
    • 2022 ESG Investing Conference
    • 2022 DC Investment Lineup Conference
    • 2022 Alternatives Investing Conference
Breadcrumb
  1. Home
  2. DEFINED BENEFIT
November 21, 2016 12:00 AM

MSCI: North American companies have largest pension funding problem

Sophie Baker
  • Tweet
  • Share
  • Share
  • Email
  • More
    Reprints Print

    The level of underfunding in corporate pension funds is at its worst in North America, shows analysis by MSCI ESG Research.

    The firm looked at the funded status of almost 5,300 companies that disclose details of their defined benefit funds, across North America, Western Europe, Asia-Pacific and Japan. It analyzed the ratio of underfunded liabilities to annual revenues of the company.

    North America’s underfunded ratio was 9.2% according to the analysis made in September. Europe came in second at 4.7%, followed by Japan at 3.7%, and Asia-Pacific at 1.8%.

    For Western Europe, Denmark had the best ratio at an average of 2.1%. That compares with the worst underfunded companies, which reside in the U.K., with an average 7.8% underfunding. In North America, Canada’s 6.1% average underfunded ratio bettered the U.S.’s 10.3% average. In Asia-Pacific, Thailand-based companies showed the best average underfunded ratios, at 1.2%, compared with the worst in Singapore at an average 2.5%.

    Compared with 2015 figures, the underfunded ratio increased across all four regions, with a few exceptions at country level. The ratio increased 21.7% in 2016 vs. 2015 in North America, 8.2% in Western Europe, and 41.1% in Asia-Pacific. For Japan, the underfunded ratio grew 5.7% over the year. Specific dates were not available.

    MSCI said six of the top 10 companies with the highest underfunded ratios are based in the U.S. E.I. du Pont de Nemours & Co. was on top with an underfunded ratio of 42% and Hess Corp. was tied for second at 36% with U.K.-based BT Group PLC. Dun & Bradstreet Corp.’s 34% underfunded ratio tied it for third with Delta Air Lines Inc. The remainder of the top 10 included CenturyLink Inc. and Entergy Corp. from the U.S., Bank of Kyoto Ltd. in Japan, BAE Systems PLC in the U.K., and Electricite de France SA, based in France.

    MSCI also looked at sectors. Utilities showed the worst funded ratios in aggregate, with an average 10.9% underfunded ratio, followed by banks at 7.5% and telecommunications at 7.3%.

    “Our findings confirmed at least some of the short-term concerns over a widening gap between pension obligations and funds set aside to meet those obligations,” said MSCI’s report, published Monday. Only Australia, Ireland, Portugal and Italy’s average underfunding ratios did not deteriorate in 2016 vs. 2015.

    Related Articles
    More plans than ever solve liabilities problem by dumping them
    U.S. companies set to contribute $15.6 billion to pension funds
    Largest DB plans see no gains in funding
    Rising discount rates give corporate pension plans biggest bump in 12 months — …
    U.K. corporate pension funding deficits fall 7.4% in November
    Find the elf, win some goodies*
    Canada Post DB plan should get solvency funding exemption — report
    MSCI taps global head of real estate applied research
    U.K. government promises continued protection for Openreach pension fund partic…
    Recommended for You
    Liability-driven investing leads to full funding
    R.I. treasurer seeks transparency laws for church plans
    R.I. treasurer seeks transparency laws for church plans
    Public pension funds adopt cost-sharing mechanisms to stem volatility
    Public pension funds adopt cost-sharing mechanisms to stem volatility
    OCIO, Anchor in Rough Seas
    Sponsored Content: OCIO, Anchor in Rough Seas

    Reader Poll

    May 9, 2022
    SEE MORE POLLS >
    Sponsored
    White Papers
    Are Factors a Thing of the Past?
    Q2 2022 Credit Outlook: Carry On
    Leverage does not equal risk
    Is there a mid-cap gap in your DC plan?
    Out of the Shadows: The Revolution in Shadow Accounting
    The pivotal role of fixed income markets in the ESG revolution
    View More
    Sponsored Content
    Partner Content
    The Industrialization of ESG Investment
    For institutional investors, ETFs can make meeting liquidity needs easier
    Gold: the most effective commodity investment
    2021 Investment Outlook | Investing Beyond the Pandemic: A Reset for Portfolios
    Ten ways retirement plan professionals add value to plan sponsors
    Gold: an efficient hedge
    View More
    E-MAIL NEWSLETTERS

    Sign up and get the best of News delivered straight to your email inbox, free of charge. Choose your news – we will deliver.

    Subscribe Today
    May 9, 2022 page one

    Get access to the news, research and analysis of events affecting the retirement and institutional money management businesses from a worldwide network of reporters and editors.

    Subscribe
    Connect With Us
    • RSS
    • Twitter
    • Facebook
    • LinkedIn

    Our Mission

    To consistently deliver news, research and analysis to the executives who manage the flow of funds in the institutional investment market.

    About Us

    Main Office
    685 Third Avenue
    Tenth Floor
    New York, NY 10017-4036

    Chicago Office
    130 E. Randolph St.
    Suite 3200
    Chicago, IL 60601

    Contact Us

    Careers at Crain

    About Pensions & Investments

     

    Advertising
    • Media Kit
    • P&I Content Solutions
    • P&I Careers | Post a Job
    • Reprints & Permissions
    Resources
    • Subscribe
    • Newsletters
    • FAQ
    • P&I Research Center
    • Site map
    • Staff Directory
    Legal
    • Privacy Policy
    • Terms and Conditions
    • Privacy Request
    Pensions & Investments
    Copyright © 1996-2022. Crain Communications, Inc. All Rights Reserved.
    • Topics
      • Alternatives
      • Consultants
      • Coronavirus
      • Courts
      • Defined Contribution
      • ESG
      • ETFs
      • Hedge Funds
      • Industry Voices
      • Investing
      • Money Management
      • Opinion
      • Partner Content
      • Pension Funds
      • Private Equity
      • Real Estate
      • Russia-Ukraine War
      • SECURE Act 2.0
      • Special Reports
      • White Papers
    • Rankings & Awards
      • 1,000 Largest Retirement Plans
      • Top-Performing Managers
      • Largest Money Managers
      • DC Money Managers
      • DC Record Keepers
      • Largest Hedge Fund Managers
      • World's Largest Retirement Funds
      • Best Places to Work in Money Management
      • Excellence & Innovation Awards
      • Eddy Awards
    • ETFs
      • Latest ETF News
      • Fund Screener
      • Education Center
      • Equities
      • Fixed Income
      • Commodities
      • Actively Managed
      • Alternatives
      • ESG Rated
    • ESG
      • Latest ESG News
      • The Institutional Investor’s Guide to ESG Investing
      • Climate Change: The Inescapable Opportunity
      • Impact Investing
      • 2022 ESG Investing Conference
      • ESG Rated ETFs
    • Defined Contribution
      • Latest DC News
      • DC Money Manager Rankings
      • DC Record Keeper Rankings
      • Innovations in DC
      • Trends in DC: Focus on Retirement Income
      • 2022 Defined Contribution East Conference
      • 2022 DC Investment Lineup Conference
    • Searches & Hires
      • Latest Searches & Hires News
      • Searches & Hires Database
      • RFPs
    • Performance Data
      • P&I Research Center
      • Earnings Tracker
      • Endowment Returns Tracker
      • Corporate Pension Contribution Tracker
      • Pension Fund Returns Tracker
      • Pension Risk Transfer Database
      • Future of Investments Research Series
      • Charts & Infographics
      • Polls
    • Careers
    • Events
      • View All Conferences
      • View All Webinars
      • 2022 Innovation Investing Conference
      • 2022 Defined Contribution East Conference
      • 2022 ESG Investing Conference
      • 2022 DC Investment Lineup Conference
      • 2022 Alternatives Investing Conference