GLOBAL - A significant 72% of companies believe their pension plans posed some level of financial risk to their organisations, a Mercer Human Resource Consulting survey has revealed.
More than half ( 56%) of the 300 companies questioned believed their pension plan represented a “moderate” financial risk, while 16% felt it posed a “great” risk to their company.
The survey showed companies based in the UK were the most concerned about the financial threat of pensions with 29% saying the risk was serious. US companies, by contrast, were the least worried as just 9% believed their operations to be at risk.
Continental Europe followed the UK when it came to pension woes, with 24% of companies admitting to concerns.
On average, the study found 16% of companies in other countries such as Canada, Australia and New Zealand believed pensions posed a threat to the company.
The greater concentration of concern among UK companies was unsurprising, Mercer said, because their average pension exposure was almost twice that in the US.
Bob Moreen, worldwide partner at Mercer in the US, commented: “Globally, companies are waking up to the fact they need to manage pension plan funding in the overall context of their corporate finances, rather than as a separate entity. Letting a plan deficit develop can create a serious dent in profits and affect business growth, so employers can’t afford to disregard the risks.”
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