Search
 

The Next Big Money Pit

Under-funded pension plans threaten sponsor balance sheets

By Staff Writer | Updated on December 01, 2002

Want to know what the next hit to corporate earnings in the U.S. could be? Take a look at the health of the nation’s defined-benefit plans. Once a nice little plus on the balance sheet of practically every company that had one, most corporations today are seeing the value of the assets in their pension plans erode–if not plummet–as the stock market nears the end of its third straight year of losses. And that means companies will have to fork over cash to make up the difference.

How bad is it? Analysts have come up with some hair-raising estimates of the extent of the pension under-funding. Standard & Poor’s Corp.’s survey of 624 big companies found a shortfall of $65.4 billion. UBS Warburg analysts calculate the shift to under-funded status from over-funded will have an adverse effect of 95 cents on the S&P 500′s earnings per share this year and another 40 cents in 2003.

Complete your profile to continue reading and get FREE access to Treasury & Risk, part of your ALM digital membership.

Your access to unlimited Treasury & Risk content isn’t changing.
Once you are an ALM digital member, you’ll receive:

  • Critical Treasury & Risk information including in-depth analysis of treasury and finance best practices, case studies with corporate innovators, informative newsletters, educational webcasts and videos, and resources from industry leaders.
  • Exclusive discounts on ALM and Treasury & Risk events.
  • Access to other award-winning ALM websites including PropertyCasualty360.com and Law.com.

Already have an account?

NOT FOR REPRINT

© 2024 ALM Global, LLC, All Rights Reserved. Request academic re-use from www.copyright.com. All other uses, submit a request to [email protected]. For more information visit Asset & Logo Licensing.

Recommended Stories

Treasury & Risk

Join Treasury & Risk

Don’t miss crucial treasury and finance news along with in-depth analysis and insights you need to make informed treasury decisions. Join Treasury & Risk now!

  • Free unlimited access to Treasury & Risk including case studies with corporate innovators, informative newsletters, educational webcasts, and resources from industry leaders.
  • Exclusive discounts on ALM and Treasury & Risk events.
  • Access to other award-winning ALM publications including PropertyCasualty360.com and Law.com.

Already have an account? Sign In Now
Join Treasury & Risk

Copyright © 2024 ALM Global, LLC. All Rights Reserved.