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More Than 80 Percent of Large Companies to Increase Their Pension Contributions

Twenty percent of companies surveyed were more likely than last year to consider delegating their entire investment policy to professional advisors, up sharply from 4 percent the year before.

December 11, 2009
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Related Topics: Financial Impact, Benefit Design and Communication, Retirement/Pensions, Latest News
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Eighty-three percent of 153 large U.S. companies with defined-benefit plans surveyed by Hewitt Associates say they expect to make additional contributions to their pension plans, with 11 percent of those contributing saying those contributions will have “a significant impact on their business,” according to a news release.

However, 31 percent of respondents said they are more likely to consider closing their plans today than they were 18 months ago, up from 11 percent in 2008. Similarly, 50 percent said they are more likely to consider freezing their plans to existing participants, surging from just 17 percent in 2008.

Twenty percent of the companies surveyed were more likely than last year to consider delegating their entire investment policy to professional advisors, up sharply from 4 percent the year before.

Almost 40 percent reduced their equity exposure over the past year and 37 percent increased their holdings of corporate bonds.

Also, 15 percent implemented “dynamic investment policies,” rebalancing their asset allocation policies as their plans’ funding status improves.

The survey was conducted in September and October.

Filed by Douglas K. Appel of Pensions & Investments, a sister publication of Workforce Management To comment, e-mail editors@workforce.com.

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