US - More than half of chief financial officers surveyed by Towers Perrin are concerned about defined benefit pension plan volatility.
The first concern named by CFOs is cash flow, immediately followed by pension plan volatility. Other issues such as risk management and access to short- and long-term financing, and executive compensation were also named by respondents.
However, the survey indicated that only about one-third of the respondents have changed the pension plan's investment strategy as a result of the financial turmoil, and even fewer (12%) have changed their hedging policies.
Towers Perrin's retirement practice principal Dave Suchsland said: "In looking at all of the issues a finance executive faces, pension plan volatility is one of the more complex challenges executives have to address.
"Part of the issue is that you have diverse stakeholders as well as a risk with a long tail. They know it's a big problem, but they are focusing on issues they can own and control, and deferring issues such as pension plan volatility that require a cross-functional team to address."
In addition, nearly 70% of respondents attached some degree of importance to managing pension-related funding needs over the next six to 12 months, with more than one-quarter saying it was "very important" or "essential".
From a risk management perspective, 61% of respondents said pension risk management needs at least a little improvement while another 10% think a lot of improvement is needed.
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