Plan sponsors calm in face of financial crisis: Survey

Only 21 of 93 employers plan to make changes to pension plans

Pension plan sponsors are staying relatively calm in spite of the ongoing financial crisis gripping the markets, according to a survey by Morneau Sobeco this month.

Of the 93 responses from employers with both defined benefit (DB) and defined contribution (DC) plans, 39 said they were very concerned and 47 were somewhat concerned about the impact of the financial crisis on their pension plans.

Relatively few, however, are taking any dramatic measures to cope with the situation.

Of the 59 DB plan sponsors that said they were very concerned or somewhat concerned, only 19 plan to take any significant action.

The most common proposed action was reducing the plan’s equity weighting or raising cash (12 of the 19 mentioned this). Only three said they would be converting to a DC plan or closing off their DB plan in response to the crisis.

Among DC plan sponsors, 27 said they were very concerned or somewhat concerned. One-half of them plan to send a special communication out to plan members to help them cope with the investment losses.

Only two of the 27 respondents plan to change their investment options and none planned to change investment managers or contribution rates in reaction to the market volatility.

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