No More Free Rides for Pension Plan Managers Boston Globe (10/17/01) Vol. 29, No. 21 p.D1; Syre, Steven; Stein, Charles
Corporate pension plans are starting to see their "free ride" of not having to fund their plans for years come to an end. Investment gains alone may no longer be enough to pay retirees. According to Malcolm Hodge, retirement practice leader at William M. Mercer in Boston, the downturn in the stock market is forcing some corporate pension plans to contribute new funds for the first time in 15 years. "The surpluses in their plans that built up in the late [1990s], in many cases, are close to being eliminated," says Hodge. In addition, corporate pensions, more so than government pensions, reaped the benefits on their investment gains. For example, companies were able to claim the excess income as their own under accounting rules. Still, most plans remain in good shape.