Pensions-Big Hits to Earnings On The Way
July 21st, 2010
As we’ve been writing about for quite a while…………..
Boards cannot maintain a 5.9% discount rate to their liabilities when 10 year Treas. are at 2.9% and annuities aren’t much higher.
Boards cannot maintain 8% and higher investment assumptions in this era of low growth with high volatility
Boards must recognize the extent of their underfunding in financial statements.
Boards must recognize the extent their actuarial assumptions are distorting reality.
Gone must be the days of playing around with the pension to boost earnings and executive compensation and retirement benefits.
Please see articles on this site, as Boards will soon recognize the extent of the issue. Investors must recognize it now!
Categories: General
