But according to Rheaume, the growth in negative perception does not stem from any one event or situation affecting plan sponsors. In fact, the survey found plan sponsors were fairly optimistic about the coming year and the prospect for the markets. And when the markets only performed slightly better than expected, their negative perception that perhaps things were not as rosy as originally thought increased.
But CFOs have other issues on their mind as well. It turns out nearly 70% of survey respondents from larger organizations believe the adoption of a single pension standards regulator for the entire country would strengthen the pension system as a whole. CFOs were also asked what they see as some of the major threats to plans. About 35% felt the level of expertise for good governance was lacking. Sixty-seven per cent felt volatility of future funding contributions is also an issue. Ian Markham, director, pension innovation with Watson Wyatt explained the solvency issue this way: “the beneficial impact of solvency levels by virtue of investment gains made in 2004 is being offset or wiped out altogether by lower bond yields and new pension actuarial standards recently introduced.”
Of the 77 respondents, 64% had defined benefit plans, 23% had defined contribution plans and 13% had combination plans. Forty-seven per cent of plans were small to medium(plans with less than $400 million)and 52.2% were large plans(plans with more than $400 million).
JUST THE FACTS
IF YOU FORCE THEM…
A new survey shows that U.S. employees who are not investing in their 401(k)plans would be happy with automatic features that force them to do so.
According to The 15th Annual 2005 Retirement Confidence Survey released by the Employee Benefit Research Institute and Mathew Greenwald & Associates, 66% of non-participants say that if their employer offered automatic enrollment, they would be very or somewhat likely to remain in the 401(k)plan. Fifty-five per cent say automatic step-up features would make them more likely to contribute to their plans.
There is a problem in China called the 4-2-1 phenomenon. That is the situation where there are four grandparents, two parents and one child, which according to the Ministry of Labour and Social Security, is creating a pension crisis. The government is set to introduce measures to encourage private and foreign companies to make sure their employees are not forgotten once they retire. Only 44.9% of urban employees and 85.4% of retired people are covered by pension plans.
The U.S. Supreme Court ruled that older workers can, in some circumstances, recover damages from their employers for harm caused by age discrimination— even if the harm was not deliberate.
But the court held that older workers must provide a lot of evidence to prove their cases. In order to protect employers from frivolous lawsuits, the court also specified that recovery of damages can occur when there is a “disparate impact,” in which the effect on workers is unintentional as well as “disparate treatment,” when the effect is clearly deliberate.
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