Volume 19, No. 6


Still NSFW? The State Of Pensions, 2009:  Pensions have a way of making things not safe in the workplace, on a couple levels. If you’re an employee who’s hoping for a retirement someday, they’re a wonderful thing - until the day you find out that your firm is freezing them or cutting benefits to keep the whole plan going. And in the investor workplace, pensions bring a lot of performance noise into the financials that relates more to accounting prowess rather than managerial ability. Parsing them out can be workplace pain for investors.

Overall, pensions improved greatly in 2009 in terms of funding. 2008’s scary markets directly impacted the funded status of pensions, and 2009’s rebound did wonders for defined benefit pension plans - even if they’re not out of the woods. There’s still quite a gap from them being fully funded. One thing that’s different in 2009: the new disclosures about asset classes and fair value hierarchy provide investors with more warnings about funding adequacy than ever before.

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