The Securities and Exchange Commission (SEC) is pledging to take a hard stand against companies that make aggressive performance assumptions. The SEC announced that it will challenge any pension fund's annual rate of return assumption that exceeds 9 percent. It added that any company that cannot back up a too-robust assumption will be forced to restate its earnings. Milliman consultant John Ehrhardt predicts pension funds will be even more bloated this year, as sponsors aim to improve funding and dodge large charges to shareholder equity. "You're going to see in many cases a doubling of plan contributions in 2003 to catch up for the losses in 2002," he says. To recover from these losses, Ehrhardt says plan sponsors ought to reexamine their assumptions, reallocate assets, and develop more realistic funding strategies.