If U.S. pension accounting rules were more honest, many sponsors would replace their current plans with group annuities.

Pension specialists at Oliver Wyman and Mercer, units of Marsh & McLennan Companies Inc., New York (NYSE:MMC), have published that conclusion in a commentary on pension earnings reporting.

U.S. pension performance “smoothing” rules help add about 4% to the earnings of all S&P500 companies, 18% to the earnings of S&P500 materials companies, and 11% to S&P500 industrial companies, the pension specialists write.

Sponsoring a defined benefit pension plan without using a annuity amounts to operating a volatile derivatives business, the specialists say.

U.K. employers are starting to recognize the need to put the burden of managing pension risk on the shoulders of group annuity issuers, and some U.S. employers could follow once new accounting rules make the true state of U.S. pension plan funding levels and exposure to risk easier to see, the specialists say.

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CORRECTION: An earlier version of this article described the type of annuities Mercer and Olver Wyman pension specialists say would be used to transfer pension risk incorrectly. The annuities would be group fixed annuities.