Login or Register

Featured Blogger

Mixed year for corporate bond sales
stephen taub

Red-Hot Thread

"The corporate brand is not only used to improve competitive positioning and express company aspirations, it can also be a powerful tool to motivate employees."

Latest Forum Posts

in Member Introductions by dbedell, 31-12-10 20:34
in Member Introductions by ramu_p888, 21-12-10 19:08
in Risk Analysis by annearf, 21-12-10 17:41

CFOZone Experts

Opinions and views from expert CFOZone members.

Tag >> pensions
Dec 07

Pension plan funding continues slow gains

Posted by Stephen Taub in pensionspension fundsPension Benefit Guaranty CorporationCashBNY Mellon Pension ServicesBNY Mellon Asset Management

Stephen Taub

Pension plans' funding status improved again last month as stocks and interest rates continued to climb.

The typical US corporate pension plan in November saw its status inch up to 80.5 percent from 80.3 percent the prior month, according to monthly statistics published by BNY Mellon Asset Management.    

Assets for the typical plan declined 0.4 percent. A slight gain of 0.6 percent in the US equity markets was offset by a drop of 4.8 percent in international stocks, according to the BNY Mellon.

Nov 16

PBGC deficit swells in recent year

Posted by Stephen Taub in pensionsPension Benefit Guaranty CorporationPBGCCash

Stephen Taub

The government agency that backstops private sector pensions saw its deficit swell by $1 billion, to $23 billion for the most recent fiscal year.

The Pension Benefit Guaranty Corp. said it has $79.5 billion in combined assets to cover a total of $102.5 billion in obligations.

Nov 03

Pension funded status improves again

Posted by Stephen Taub in stock marketpensionsPension Benefit Guaranty CorporationCashCareers/ManagementBNY Mellon Asset Management

Stephen Taub

Nothing like a stock market rally to alleviate concerns about a pension funding crisis.

The funded status for the typical US corporate pension plan climbed 4.4 percentage points to 80.3 percent, the best status since May 31, 2010, according to BNY Mellon Asset Management's monthly report.

Oct 07

Pension funding level rebounds in September

Posted by Stephen Taub in Risk and CompliancepensionsCashBNY Mellon Pension Services

Stephen Taub

What a difference a strong stock market makes.

Thanks to the huge September surge in stock prices, the typical US corporate pension enjoyed its strongest one-month gain this year.

Sep 08

Pension plan funding drops to four-year low

Posted by Stephen Taub in Riskpensionsdefined benefit plansCashBNY Mellon Pension Services

Stephen Taub

US corporate pension plans fell to their lowest funding level since BNY Mellon Asset Management began tracking this data in 2006.

The funded status of the typical defined benefit plan dropped 5.6 percentage points to 71.3 percent at the end of August.

Aug 25

Proposed pension reg could cause companies to hike funding

Posted by Stephen Taub in RegulationpensionsPBGC, ERISA, complianceCash

Stephen Taub

The Pension Benefit Guaranty Corp. (PBGC) has published a proposed regulation which, if adopted, may force companies to increase the funding of their pension plan in excess of legal requirements, warns law firm Wachtell, Lipton, Rosen & Katz.

The regulation impacts Section 4062(e) of ERISA, which requires a company that sponsors a single-employer defined benefit pension plan to notify the PBGC within 60 days if it closes down operations at a facility in any location and, as a result, more than 20 percent of the company's employees participating in the pension plan are fired.

Jul 29

How a CFO brings government into 21st century

Posted by Jeremy Smerd in retirement benefits, retiree healthcarepensionshealth carebenefits

Jeremy Smerd

If you live or work in New York City you know how the subway can be both a blessing (when it runs on time) and a curse (when it doesn't) or for reasons that on Wednesday became clear: fare hikes.

If you don't live in New York you can appreciate why the agency responsible for public transit, the Metropolitan Transportation Authority, is having such a difficult time making ends meet. At the top of the list is compensation and benefits costs, which account for two-thirds of the MTA's $12 billion operating budget for 2011.

The MTA says its health care costs are going up about 9 percent annually-which is actually in line with national increases. The challenge for a public agency of course is that it is locked into
contracts with its heavily unionized workforce. Making changes is not easy.

The plan the MTA put forward Wednesday was to enter in what it called "net zero" contracts with its unions-contracts in which any raise would be "paid" for by givebacks in productivity, changes in work rules or increased contributions to health care benefits. The unions took exception to this proposal but no one doubts that the compensation structure of government employees needs to come in-line with their private sector counterparts. Andrew Cuomo, the Democratic nominee for governor, has made reforming this imbalance part of his

Debt service aside (and the MTA's debt service totals $1.8 billion this year, growing to $2.5 billion by 2014), the MTA, like so many government entities throughout the country, has long term health care challenges ahead. Its health care retirement obligation totals $1.4 billion growing to $1.7 billion by 2014. While the MTA continues to pay enough into its retiree health care fund to pay for its current retirees' health care, the authority, citing this year's cash-flow problems, will not pay $57 million this year into a fund for future obligations.

The Great Recession has helped bring the issue of government post-retirement obligations to light. As government revenues shrink and obligations grow, taxpayers sense an inherent injustice between their own grim retirement prospects and the assurances given to public sector workers. Subway service cuts and fare hikes are only meaningful if they address the long-term problems rather than enable government to deal with short term crisis.

Cuomo is banking on this public displeasure, as is the MTA. Next year the MTA's contract with its largest union is up for renewal. The transit authority will be able to test whether it has public support for changing the way the state entity does business with unions. Bringing government into the 21st century by reducing health care and other post-retirement obligations will be good for taxpayers and for businesses, including those with heavily unionized workforces.


Jul 15

The value of tying exec comp to debt

Posted by Karen1 in pensionsexecutive compensationcompensationAIG


For years, the prevailing wisdom has held that executive compensation should be tied to a firm's equity. That way, the theory goes, management's goals are aligned with shareholders' interests.  

This thinking is fine if you're a shareholder. However, what about bondholders? "If you're compensated only with equity, you're not worried about creditors losing money," points out Alex Edmans, a professor of finance at Wharton who has researched executive compensation. He also is the author of a recent study, "Inside Debt." 

May 27

DB pensions continue march toward extinction

Posted by Stephen Taub in Towers Watson, retirement benefits, pensionshybrid pension plansdefined contribution plansdefined benefit plansCash401k

Stephen Taub

The number of large companies offering traditional defined benefit (DB) pension plans continues to decline, as they steadily march toward extinction.

Towers Watson now counts just 17 of the Fortune 100 companies still offering DB plans, down from 20 in 2009 and exactly half the total of five years ago.

Mar 08

Many bank CEOs were paid extra for non performance

Posted by SherylNash01 in retirement benefits, pensionsexecutive compensationcareer/managementbonuses


When does no bonus still mean a bonus? When pension payments compensate for the absence of cash rewards.

A new report from The Corporate Library, an independent corporate governance research firm, found that 17 CEOs of financial services firm who were not paid bonuses in 2008 received substantial increases in their pension or other retirement benefits. In fact, more than one tenth of CEOs of S&P 500 companies found themselves in this situation in 2008, compared with only one company in 2007.

<< Start < Previous 1 2 Next > End >>

Market Data

Copyright © 2009-2011 CFOZone. All rights reserved. CFOZone is a property of PSN, Inc.