US - Pension funds still do not publish sufficient information to investors about cash funding requirements, according to a report by credit ratings agency Fitch.
Despite changes brought in by the Pension Protection Act (PPA) of 2006 and Statement of Financial Accounting Standards No 158, Fitch has claimed fixed income investors had to rely on voluntary disclosure to figure out issuers’ cash flow obligations.
The report claimed: “For credit analysts, the most important issue pertaining to pension obligations is a plan’s current and future claims on a company’s cash flow.”
It continued: “In spite of the changes implemented in 2006, published information is still insufficient to enable anyone (outside of the company, its actuaries and certain government organisations) to determine a corporation’s defined benefit plan cash-funding requirements.”
Regulatory changes would also mean the most acutely underfunded plans would have to increase cash funding to make up shortfalls more quickly.
The report criticised regulatory requirements for being overlapping and inconsistent.
Fitch has also released details of its updated methodology to evaluate corporate pension funds and any credit implications for the issuer as mandated by the PPA.
The agency said it would concentrate on a pension plan’s funding status, leverage levels for pension obligations and expected inflows from contributions and operations.
Potential changes to accounting standards and increased pressure on companies to accelerate contributions could worsen FTSE 100 scheme funding by up to £100bn, according to Lane Clark and Peacock (LCP).
Smart Pension has taken on over 20,000 active members from the £20m Corpad Master Trust, following a strategic review by the ceding firm's trustees.
The Universities Superannuation Scheme (USS) allegedly obstructed a whistleblower as she tried to discover the true value of the deficit in its defined benefit (DB) section, according to reports.
The Cost Transparency Initiative (CTI) has launched a number of templates and guidance to help pension schemes deliver greater value for savers with enhanced disclosure of transaction cost information.