Fewer chief financial officers and vice-presidents of human resources believe that the pension funding crisis in Canada will be long-lasting, according to a survey.
The survey on pension risk, conducted by Watson Wyatt in association The Conference Board of Canada, found that the percentage of CFOs who feel the pension crisis will last a long time has declined to 48% this year from 61% in 2006.
An additional 19% of CFO respondents felt that there is a pension crisis, but it is cyclical.
Vice-presidents of human resources showed similar levels of concern. Forty percent said the crisis would be long-lasting, compared to 67% last year. And 19% said it would be cyclical.
“Compared to one year ago, the sense of crisis appears to be abating, but CFOs are still concerned about both the volatility and the current level of pension expense,” says the Conference Board’s Gilles Rhéaume, vice-present, public policy. “In an environment of labour shortages, pensions—especially defined benefit plans—are considered a very valuable recruitment and retention tool.”
Separately, 41% of respondents with a defined benefit(DB)plan arrangement indicated that they had made some form of plan design changes in the last 24 months or were planning to do so in the next 12 months.
The survey covered 141 organizations, with 45 respondents from publicly traded companies, 44 from private firms, 41 from public sector companies, and 17 from not-for-profit organizations.
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