Survey finds majority of CFOs frustrated by pension schemes
The majority of north American CFOs think that, despite improved stock market performance, pension schemes are having a negative impact on corporate finances, according to a survey by SEI Investments. The survey shows that, during the year since they were last interviewed, CFOs have become even more frustrated by the burden of pension schemes. Of the 100 CFOs interviewed, 76% said pension schemes were proving detrimental to corporate finances, up from 61% a year ago.
More specifically, 62% said that pension schemes had lowered corporate profitability while 29% reported a negative impact on cash flow. Furthermore, 41% of CFOs claimed their company pension plan was distracting them from running their business.
When asked what they thought the biggest burdens were in maintaining defined benefit schemes, 78% cited volatile and unpredictable contributions.
?This has become an acute pain that is now spreading well beyond the traditional pension spectrum.? said Jim Morris, senior vice president of SEI's Retirement Solutions. ?Credit analysts, equity analysts and bankers are becoming keenly aware of how pension plan decisions are impacting corporate finance and they want to know that companies have a strategy to control this impact.?
He added: ?It's clear that CFOs want greater visibility and control of pensions and their impact on corporate finances.