NU Online News Service, Feb. 5, 1:40 p.m. – Towers Perrin, New York, an employee benefits consulting firm, says 2001 stock market losses and increases in liabilities will lead to big increases in costs for sponsors of traditional defined-benefit pension plans.
In recent years, stock market gains have pumped up assets at most defined-benefit plans, eliminating the need for many sponsors to make contributions.
This year, more employers will have to make pension contributions, marking an end to “funding holidays,” Towers Perrin says.
Pension contribution costs could have a dramatic effect on reported earnings at publicly traded corporations, the firm warns.
“In some cases, these pension obligations are comparable in size to the organization’s net worth,” says Eric D’Amours, a Towers Perrin retirement consultant.