State:
August 18, 2005
Most Employers Face Small Amount of Risk over Pension Liabilities

Pension plan liabilities pose little risk to the financial health of most U.S. companies, according to an analysis by Watson Wyatt, a HR consulting firm.

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Watson Wyatt's analysis found that pension plan liabilities at about half of the Fortune 1000 companies with defined benefit plans pose little risk to the financial stability of the company's core business.

Companies with moderate or high pension risk may face financial challenges from their pension plan during poor market conditions. About 30 percent of companies face a moderate amount of risk, while the remaining 20 percent are exposed to relatively high risk levels.

"Despite pockets of trouble in the pension system, employers for the most part face only a small or moderate amount of risk," said Julia Coronado, senior research analyst at Watson Wyatt. "In fact, since there are relatively few companies with high pension risk, the broader risk to the U.S. economy seems to be minimal."

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