Pondering Pensions: Are They "Making" Earnings?: As valuations have contracted recently, quality of earnings (and revenues) issues have moved to the forefront of investors' concerns. Their search for unreal income has intensified as firms continue to make headlines by falling from the grace of the SEC. A popular concern has been whether or not firms have made their earnings by using pension plans as profit centers. The bull market of the last decade has swelled pension plans to proportions that would have seemed outlandish when the accounting for pension plans was developed in the late 1980's - and that accounting methodology is chock full of assumptions that can be tweaked to achieve a desired result. The question is: have they really been tweaked? Financial statements provide only circumstantial evidence. This report looks at the evidence found in the companies composing the S&P 100. The findings: positive earnings effects exist, and they are considerable - and more likely to be the result of the accounting model itself rather than its outright manipulation.